Reuters
Will the Fed ‘raise and hold’ rates? Traders bet they will not
Federal Reserve policymakers have all but promised to dial down the pace of their interest rate hikes next week, and over coming months feel their way to a policy rate high enough to push down on inflation, but not so high as to crash the economy. Once they get rates to that point, in an approach one U.S. central banker has dubbed “raise and hold,” they intend to stand pat as the higher borrowing costs work their way through the economy to cool the labor market and ease price pressures. After a report on Friday showing job growth did not slow as much as expected last month, futures contracts tied to U.S. short-term rates reflected bets the Fed would continue to raise rates next year, ultimately topping out just under or just over 5% by May.
