The Clap
Minutes from the Federal Reserve’s meeting earlier this month revealed that a 0.5% interest rate hike is likely in each of its next two meetings.
The deets
The committee responsible for deciding monetary policy is set to meet in mid-June 2022, & then again at the end of July 2022.
A 0.5% rate hike in both of those meetings would be slightly more aggressive than markets expected. The general consensus was that the Fed would hike rates by 0.5% in its May & June meetings only, & then by 0.25% in each remaining meeting in 2022.
Why this matters
Minutes also highlighted the possible shift from a monetary policy that is now “neutral” into “restrictive”. The terms “neutral” & “restrictive” here refer to the economy’s growth, signaling that the Fed wants to tame inflation even at the risk of restricting U.S economic growth.
