Today the Fed the the brakes on the rate hikes. So will the Fed stay on pause or will it continue raising the rates at the next meeting?
Seems like economists don’t know either.
“There was a strong case for pausing at 4.5%,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics. “There was already plenty of evidence the previous hikes had begun to soften growth.” He predicts the Fed will start to cut rates by next April.
“You can’t fight inflation without risking overkill on the economy,” said Ethan Harris, chief U.S. economist at Lehman Brothers, who thinks the Fed shouldn’t have paused and predicts it will eventually raise the rate to 5.75%. “That is a risk, and it’s a risk they should take.”
There’s an interesting theory I read somewhere put forth by a trader[of course]. You should watch how the market reacts to the Fed’s rate hike [or not] and see what it does. Apparently if you take the opposite position, you will be rewarded the very next day with an inverse movement in the market and a profitable trade. [NOTE: this is not something I follow, nor recommend, just something random I read]. Since the market was down today, it should supposedly move up tomorrow. Lets see if it works! [if it does, I still won’t recommend it]