A 25Bp Fed Rate Hike Expected but 50Bp Could Give Fed Some Control of Situation
Dow Jones
58 mins ago
0555 GMT - ING rates strategists expect a 25-basis-point interest-rate hike by the Federal Reserve on Wednesday, "but 50bp might be the right move, as it could be more fitting with how Chairman Warsh might like to pursue policy," they write in a note. Delivering a 50bp hike would see the Fed take some degree of control of the situation, which may well be more preferable from Chairman Warsh's perspective, ING's rates strategists say. Presumably, such a move wouldn't be followed by forward guidance, but it could still be "guided" as akin to a "one and done", or at the very least, getting ahead of the curve, through a chunky "insurance hike", they say. That's the reward but the risk could be market instability, the strategists add.
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