{"id":504532,"date":"2022-10-28T21:33:00","date_gmt":"2022-10-28T18:33:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-fed-another-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell\/"},"modified":"2022-10-28T21:33:00","modified_gmt":"2022-10-28T18:33:00","slug":"the-fed-another-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-fed-another-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell\/","title":{"rendered":"#The Fed: Another Fed jumbo rate hike is expected next week and then life gets difficult for Powell"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f3efa903f4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f3efa903f4\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-fed-another-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell\/#%E2%80%9CThe_Fed_Another_Fed_jumbo_rate_hike_is_expected_next_week_and_then_life_gets_difficult_for_Powell%E2%80%9D\" >&#8220;The Fed: Another Fed jumbo rate hike is expected next week and then life gets difficult for Powell&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-fed-another-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell\/#All_eyes_on_what_Powell_says_about_possible_downshift_in_rate_rise_size_in_December\" >All eyes on what Powell says about possible downshift in rate rise size in December<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/the-fed-another-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell\/#Greg_Robb\" >Greg Robb<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CThe_Fed_Another_Fed_jumbo_rate_hike_is_expected_next_week_and_then_life_gets_difficult_for_Powell%E2%80%9D\"><\/span>&#8220;The Fed: Another Fed jumbo rate hike is expected next week and then life gets difficult for Powell&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"All_eyes_on_what_Powell_says_about_possible_downshift_in_rate_rise_size_in_December\"><\/span>\n  All eyes on what Powell says about possible downshift in rate rise size in December<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001335107\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001335107\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       First the easy part.<\/p>\n<p> Economists widely expect the Federal Reserve to  <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>rove the fourth straight jumbo interest rate rise at its meeting next week. The three quarters of one percentage point hike would bring the central bank\u2019s benchmark rate up to a level of 3.75%- 4%. <\/p>\n<div class=\"paywall\">\n       \u201cThe November decision is a lock. Well I would be floored if they didn\u2019t go 75 basis points\u201d said Jonathan Pingle, chief U.S. economist at UBS.<\/p>\n<p>The Fed decision will come at 2 p.m. on Wednesday after two days of talks.<\/p>\n<p>What happens at Fed Chairman Jerome Powell\u2019s press conference a half-hour later will be more fraught.<\/p>\n<p>The focus will be on whether Powell gives a signal to the market about plans for a smaller rise in its benchmark interest rate in December.<\/p>\n<p>The Fed\u2019s \u201cdot-plot\u201d projection of interest rates, released in September, already penciled in a slowdown to a half-point rate hike in December, followed by a quarter-point hike early in 2023.<\/p>\n<p>The market is expecting signals for a change in policy and many think Powell will use his press conference to hint that a slower pace of interest rate rises is coming. <\/p>\n<p>A <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/fed-set-to-raise-rates-by-0-75-point-and-debate-size-of-future-hikes-11666356757?mod=hp_lead_pos1&amp;mod=article_inline\" class=\"icon none\">Wall Street Journal story last week <\/a>that said some Fed officials are not keen to keep hiking rates by 75 basis  points per meeting. That , alongside San Francisco Fed President Mary Daly\u2019s comment that the Fed needs to start talking about slowing down the pace of hikes, were taken as a sign of a slowdown to come by the stock and bond markets.<\/p>\n<p>\u201cNo one wants to be late for the pivot party, so the hint was enough,\u201d said Ian Shepherdson, chief economist at Pantheon Macroeconomics. <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Luke Tilley, chief economist at Wilmington Trust, thinks that Powell will signal a smaller rate hike in December by focusing on some of the good wage inflation <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> that was published earlier Friday. <\/p>\n<p>There was a clear slowdown in private sector wage growth, Tilley said.<\/p>\n<p><strong>See<\/strong>: U.S. third-quarter wage pressures cool a little from elevated levels<\/p>\n<p>But the problem with Powell signaling he has found an exit ramp from the jumbo rate hikes this year is that his committee members might not be ready to signal a downshift, Pingle of UBS said.<\/p>\n<p>He argued that the inflation data writ large in September won\u2019t give Fed officials any confidence that a cooling in press pressures is in the offing.<\/p>\n<p><strong>See<\/strong>: U.S. inflation still running hot, key PCE price gauge shows<\/p>\n<p>Another worry for Powell is the future data might not cooperate.<\/p>\n<p>There are two employment reports and two consumer price inflation reports before the next Fed policy meeting on Dec. 13-14.<\/p>\n<p>So Powell might have to reverse course. <\/p>\n<p>\u201cIf you pre-commit and the data slaps you in the head \u2013 then you can\u2019t follow through,\u201d said Stephen Stanley, chief economist at Amherst Pierpont Securities.<\/p>\n<p>This has been the Fed\u2019s pattern all year, Stanley noted. It was only in March that the Fed thought its terminal rate, or the peak benchmark rate, wouldn\u2019t rise above 3%.<\/p>\n<p>While the Fed may want to slow down the pace of rate hikes, it doesn\u2019t want the market to take a downshift in the size of rate rises as a signal that a rate cut is in the offing anytime soon.<\/p>\n<p>But some analysts believe talk about the first cut will come soon after the Fed reduces the size of its rate rises. <\/p>\n<p>In <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> terms, the Fed wants financial conditions to stay restrictive in order to squeeze the life out of inflation.<\/p>\n<p>Pingle expects Kansas City Fed President Esther George to formally dissent in favor of a slower pace of rate hikes.<\/p>\n<p>There is growing disagreement among economists about the \u201cpeak\u201d or \u201cterminal rate\u201d of this hiking cycle. The Fed has penciled in a terminal rate in the range of 4.5%-4.75%. <\/p>\n<p>Some economists think the terminal rate could be lower and others who think that rates will go above 5%. <\/p>\n<p>Those who think the Fed will stop short of 5% tend to talk about a recession and the Fed fast pace of hikes \u201cbreaking something.\u201d Those who see rates above 5% think that inflation will be much more persistent.<\/p>\n<p>Ultimately, Stanley thinks that the data isn\u2019t going to be the deciding factor.<\/p>\n<p>\u201cThe answer to the question of what either forces or allows the Fed to stop is probably not going to come from the data. The answer is going to be that the Fed has a number in mind to pause,\u201d he said.<\/p>\n<p>The Fed \u201cis careening toward this moment of truth where it has very tight labor markets and very high inflation and the Fed is going to come out and say \u2018okay, we\u2019re ready to pause here\u2019.\u201d<\/p>\n<p>\u201cThat strikes me that is going to be a very volatile period for the market,\u201d he added.<\/p>\n<p>Fed fund futures markets are already volatile with traders penciling in a terminal rate above 5% two weeks ago and now seeing a 4.85% terminal rate.<\/p>\n<p>Over the month of October, the yield on the 10-year Treasury note<br \/>\n        TMUBMUSD10Y,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.000%\" channel=\"\" class=\"\">4.020%<\/bg-quote><br \/>\n       rose steadily this month above 4.2% before softening to 4% in recent days. <\/p>\n<p>\u201cWhen you get close to the end, every move really counts,\u201d Stanley said.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Greg Robb\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/greg-robb\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/grobb2000\",\"text\":\"@grobb2000\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:grobb@marketwatch.com\",\"text\":\"grobb@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Greg_Robb\"><\/span>Greg Robb<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"66_MW\" author-name=\"Greg Robb\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fanother-fed-jumbo-rate-hike-is-expected-next-week-and-then-life-gets-difficult-for-powell-11666982034%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-7145-F43EF7AD62DE%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;The Fed: Another Fed jumbo rate hike is expected next week and then life gets difficult for Powell&#8221; All eyes on what Powell says about possible downshift in rate rise size in December First the easy part. Economists widely expect the Federal Reserve to approve the fourth straight jumbo interest rate rise at its meeting&#8230;<\/p>\n","protected":false},"author":1,"featured_media":504533,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-485080\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-504532","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/504532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=504532"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/504532\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/504533"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=504532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=504532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=504532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}