Encouraged by December’s CPI figures and recent nonfarm payrolls report, investors expect the Fed to raise rates by just 25-basis-points in February versus the 50 or 75-basis-point hikes it delivered previously.
However, the core inflation remains well above the central bank target of 2%. Policymakers have signaled a slowdown in rate hikes but did not promise an easing. According to Bankrate’s Fourth-Quarter Economic Indicator survey, the Fed will likely take rates to a target range of 5.25-5.5%.
