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FOMC officials are quite likely to hike benchmark rates by 25 basis points at their next meeting. … [+]
Federal Reserve policymakers will likely increase the target range for the federal funds rate at their meeting next month, opting for a 25 basis point hike, according to recent figures provided by the CME FedWatch Tool.
Data pulled earlier today show 97.4% odds that these government officials will choose to implement the aforementioned rate hike at their upcoming policy meeting.
The target range has increased by 450 basis points since March, as Fed officials pursue aggressive monetary tightening in an effort to bring inflationary pressures under control.
These sustained rate hikes have put upward pressure on broader interest rates, a development that could reduce demand for risk assets that do not make regular payments to investors, including many cryptocurrencies and stocks.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Members of the Federal Open Market Committee have emphasized that they will closely monitor economic data to get a better sense of what decisions to make, and they got their latest crucial piece of information today when the latest jobs report showed the U.S. economy created 517,000 positions last month.
This amount far surpassed the widely reported figure of 187,000 new jobs that had been predicted by economists taking part in a Dow Jones poll.
Since the labor market continues to favor workers, they could harness the situation to demand greater compensation, a development that could contribute to ongoing inflationary pressures, giving the FOMC greater incentive to keep hiking the benchmark rate.
The screenshot depicted below, taking close to 2 p.m. today, shows the projected odds for the upcoming FOMC meeting. The CME FedWatch tool uses 30-Day Fed Fund futures pricing data to quantify market participants’ expectations.
This image shows the 97.4% odds the FOMC will hike the benchmark rate 25 basis points in March.
The chart above shows 97.4% odds of a 25 basis point rate hike at the next Fed policy meeting and 2.6% odds that government officials will leave the benchmark rate intact. Currently, the target range is 450 to 475 basis points. At this point, the aforementioned range is at its highest since 2007.
All eyes will be on the upcoming FOMC meetings, as these government officials decide how much they want to increase the target range for the federal funds rate.
In December, these policymakers predicted that the benchmark rate would max out at 5.1% this year, according to a median forecast included in the Summary of Economic Projections.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.
