InvestorQ : Has the US Central Bank indicated that they would be raising their interest rates soon?
Anjana Aiyar made post

Has the US Central Bank indicated that they would be raising their interest rates soon?

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Khushi Patel answered.
5 months ago
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The hint from the Fed dot-plot chart is that by 2023, we could see 2 rate hikes of 25 basis points each taking the interest rate from the current near zero levels to around 0.60%. Again, members differ in their views. While Neil Kashkari is not keen on rate hike still 2024, others like Bullard want the rate hikes to happen sooner. One reason for the rate hike is that US inflation has been rising and GDP growth is picking up. That is the key trigger.

However, the rate hikes when they happen would be preceded by tapering of the buying purchase program at lease 1 year in advance. So if the rate hikes have to happen by 2023, tapering could start around late 2021 or early 2022. That would create a good deal of liquidity disruption in the US as well as in the global markets. However, the US Fed has indicated that it would also wait for unemployment to fall to 4.5% before rate hikes.
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