The market discounts that the FED rate hike could be up to 50 bps

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Posted on May 3, 2022 This week investors have their sights set on the Fed meeting, which starts today. Although, it will be tomorrow when the institution communicates its rate decision. Under this scenario, the 10-year US bond exceeded the 3% level, taking real yields to positive territory, for the first time since 2018. Today at dawn it was known that the Bank of Australia raised rates to 0.35%, compared to to the 0.25% expected, thus accumulating two increases in the year, the first placed it at 0.10%. Two days after the monetary policy decision to be announced by the FED, market expectations would be for an interest rate hike of 50bps, the highest in more than three years. It is also possible that a date will be published to start the sale of bonds from the organization’s balance sheet that reaches €9bn. In addition, a new rate hike of 25bps by the BoE is expected this coming Thursday. In the United States, the consumer sentiment index from the University of Michigan for April was 65.2 points, slightly below expectations and the figure for the previous period (both 65.7 points), since the high level of inflation put pressure on the consumption of American society. The manufacturing ISM for the month of April fell to 55.4 points, below the estimates (57.6 points) and the figure for the previous period (57.1 points). This indicator stood at the lowest level since 2020 as growth in orders and production softened. INFORMATIONTitleThe market discounts that the FED rate hike could be up to 50 bpsDescriptionTwo days after knowing the monetary policy decision to be announced by the FED, market expectations would be for an interest rate hike of 50bps, the highest in more than three years. Author GLOBALCAJA

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