Once the Fed’s rate reaches 2.8%, it’s expected to stay there until 2023 before retreating a bit to 2.4%.
Wednesday’s quarter-point increase was less than St. Louis Fed Chair James Bullard had pushed — he had wanted a half-point increase — but “uncertainty” caused by Russia’s invasion of Ukraine delayed that. But ING Economics says you should look for a 50bp increase in May, especially if Russia-Ukraine talks reach a positive conclusion.
“Calls for more aggressive, swifter policy tightening would certainly build if inflation remains up around 8%, there is more evidence of a de-anchoring of inflation expectations and the unemployment rate remains below 4%,” ING says.