The short-term Fed Funds Rate rose from zero percent in March 2022 to 5.375%, increasing financing costs for businesses and individuals. Over the past months, the hawkish monetary policy to battle inflation has stopped as the central bank paused short-term rate hikes when inflationary pressures subsided. Many market participants believe the Fed’s next move will be to cut rates, but inflation remains stubbornly above the central bank’s 2% target.
In my January 26 Barchart article on the bond market, I wrote:
