The article discusses the anticipated decision by the Federal Reserve (Fed) to increase rates by 25 basis points. The author emphasizes the importance of how the Fed, particularly Chair Powell, will articulate their view of future policy. The article suggests that the Fed might leave room for future rate hikes based on data. The author also notes that beneficial base effects, which have been lowering year-over-year inflation readings, are expected to roll off starting in July. This coincides with increases in energy, agriculture, services, and other costs.
- Anticipate a rate hike: The Fed is expected to increase rates by 25 basis points, a move that the market widely expects.
- Watch for future policy indications: The way the Fed articulates its view of future policy will be crucial. There may be room for future rate hikes based on data.
- Prepare for inflation changes: Beneficial base effects that have been lowering year-over-year inflation readings are expected to roll off starting in July, potentially leading to higher inflation readings.