Abgeschwächte Anhebung um 50 Basispunkte durch die Fed verrät falsche Aussichten

On Wednesday, 14 December, the U.S. Federal Reserve announced its last rate hike of the year – a 50-basis point increase to the Fed fund rate, well in line with the market’s expectations. This brings the Fed benchmark rate to 4.25% – 4.5%, the highest in 15 years. While a dovish step down from the previous 4 consecutive 75-point hikes, the most recent 50-point hike is hardly the peak for rates, dashing the hopes of investors looking forward to a dovish pivot under the shadow of a looming recession.

Fed Chair Jerome Powell has indicated that rates will continue to increase, with rates expected to peak in 2024 at 5.1%, according to the FOMC’s dot plot. This brings the expected “terminal rate” up from September’s forecast of 4.6%, pointing to the Fed’s expectations that inflation will require sustained action to come down.

Nach der Markteinführung

Markets have been pricing in the 50-point hike ever since the Fed’s last outsized hike on 2 November, bringing the S&P 500 higher by 7% between the two FOMC meetings. Hawkish signalling from Powell, however, saw the index plunge roughly 2% as Treasury yields and the dollar jumped.

For all the hard numbers and projections released by various agencies, one of Wall Street’s favourite forecasting methods is scrutinising every word (or the lack of certain words) of Powell’s, treating the Fed Chair like a prophet. 

Jim Caron of Morgan Stanley Investment Management, for example, points out the Fed’s lack of indication that previous hikes were beginning to work – saying, “there’s no tip of the hat to the notion that [the pace of] inflation is starting to decline. They just completely ignored it.”

Even with the Fed’s slightly-surprising Hawkish tone, the overall narrative remains consistent: no dovish pivot until inflation starts moving directly towards the Fed’s targetted 2%. 

“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” said Powell. 

What should investors look out for next? While the inflation narrative is unchanged, the timeline has tightened. Monetary policy takes some time to flow through the markets and take effect, and the last three rate hikes are only beginning to show signs of effect with two consecutive softer-than-expected CPI readings. All this comes as multiple warnings of a recession in 2023 are sounded. The question is: can the Fed stick a soft landing in time? 

Investors are now advised to look out for the last major economic release from the U.S. this year, the quarter-on-quarter GDP figure, which will be released at 16:30 (GMT+2) on Thursday, 22 December. 

Als freundliche Erinnerung: Behalten Sie die Marktveränderungen im Auge, kontrollieren Sie Ihre Positionen und steuern Sie Ihr Risiko gut.