This month the Fed raised its fed funds rate by 75bps to 1.50-1.75% to curb soaring inflation in the US. This was the Fed’s first 75bps rate increase since 1994. We think the current Fed tightening cycle is likely to be very similar to 1994’s aggressive cycle.
In 1994, the Fed raised interest rates at every meeting of the year by 50bps and finished the year by increasing the fed funds rate by 75bps at the last meeting of the year.
We expect the current Fed hiking cycle to be similarly rapid in 2022. Tune in to our latest podcast with chief economist, Mansoor Mohi-uddin, to find out more.
