Market expectations are for the Federal Reserve later today to raise the federal funds target range by +25 bp to 5.00%-5.25%, the highest since 2007. The markets are also expecting the Fed to signal a pause in its rate-hike campaign, with tighter lending conditions and signs of a slowing economy suggesting inflation will cool in the months ahead.
The ongoing financial-market turmoil has bolstered speculation the Fed today will signal a pause in its aggressive rate hikes. Confidence in the U.S. banking sector has been shaken after First Republic Bank this week became the third U.S. lender to fail this year. The markets will also look to post-FOMC meeting comments today from Fed Chair Powell for clues as to the future direction of Fed policy.
