A Hike Into The Storm?

The Federal Reserve two-day meeting will conclude on March 16. Ahead of the meeting, the Fed Chief needs to testify, and the markets will be able to determine if the Fed will increase rates by 25-basis points or even nothing.

The key question is whether the Fed will hike the cash rate in the face of the Ukraine storm – a storm which risks spilling out across Europe and into financial markets, which have already reacted badly as the risks started to dawn.

Hopes that commodity prices had put in a high near the end of last year now appear to have been dashed decisively. At the same time, the point at which raw material prices begin to take headline inflation rates lower is moved further into the future. Economists’ forecasts still call for a peak in inflation some time in the next few months — the Ukrainian conflict looks as though it will delay that peak.

In fact Commodity prices soared the most since 2009 as Russia’s invasion of Ukraine threatens key supplies of energy, crops and metals that were already tight as major economies emerged from the pandemic.

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Author: Martin North

Martin North is the Principal of Digital Finance Analytics

One thought on “A Hike Into The Storm?”

  1. – If I were forced to make a bet what the FED is going to do then I would place a bet on a hike of 0.25%.
    – I would like to point out something else. In Canada the government doled out “government support” as well. But now with Canada coming out of the pandemic the people who have received that support are now “facing the music”. And this “music” is called “taxes”. This support is considered to be “income” and canadians now seeing their tax bill going up.

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