The Market Expects The Fed To Raise Interest Rates More Than 4 Times This Year, And The Analysis Thinks It Is Too Aggressive

The market is focused on whether the US Federal Reserve's meeting on interest rates this week will provide further views on the pace of interest rate hikes this year. According to market estimates, the probability of a rate hike in March is nearly 87%. Goldman Sachs further predicts that there may be more than 4 interest rate hikes throughout the year, and there is even a chance to shrink the balance sheet as early as May.

However, independent foreign exchange analyst Chen Jianhao believes that the market's view is too aggressive, and the pace of interest rate hikes in the second half of the year is still affected by a number of factors, and the pace of policy tightening may not be as fast as expected.

He expects that the Federal Reserve may raise interest rates twice in the first half of the year to suppress inflation. The variables in the second half of the year include the political impact of the mid-term elections, the Federal Reserve expects inflation to fall in the middle of the year, and may revise its view on interest rate hikes. He also pointed out that if the Fed starts to shrink its balance sheet, it may not need to raise interest rates too many times, and the reversal of the economic situation and the variant virus will affect the pace of interest rate hikes.

Chen Jianhao said that although the visibility of the economic outlook is not very high at present, there is almost no suspense in raising interest rates in March, and the market has begun to reflect that. .