FTDS - The Fed On Inflation: Doing Whatever It Takes
- With a 75-basis point rate hike at its June 15 meeting, the Fed intended to send a very clear message to markets: it is serious about bringing inflation down.
- In the aggressive tightening scenario, we think the Fed will front-load interest rate increases - aiming for a higher terminal rate of 3.5%-4.0% in 2023 - fostering tighter, even restrictive, financial conditions.
- A soft landing is still possible, but regardless, it will be a bumpy ride. And investors should be prepared for more risk and continued uncertainty ahead.
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The Fed On Inflation: Doing Whatever It Takes