About the Video
The U.S. Federal Reserve (Fed) is preparing to raise rates in March for the first time since the coronavirus pandemic struck the US as it attempts to curb the surging inflation. Here’s everything you need to know as an investor.
🔴 𝗦𝘁𝗮𝗿𝘁 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗜𝗕𝗞𝗥 ➡️ Click Here
⬇️Timestamps:
0:00 → Introduction
0:34 → What is interest rate?
2:05 → Time value of money
3:44 → How are interest rates determined?
6:48 → How does interest rate affects inflation?
8:27 → What happens when interest rates increase?
11:44 → Conclusion
Fed officials, responding to hot inflation, have sped up the taper of their asset purchases and are on track to conclude the program by the middle of next month. During the meeting, the FOMC discussed balance sheet runoff plans and that debate was reflected in the minutes.
A move at the FOMC’s next meeting on March 15-16 is fully priced into markets and there’s been some betting that officials could increase rates by as much as 50 basis points. Investors see at least 150 basis points of tightening in 2022, up from 75 basis points just a few weeks ago, as the evidence continues to show a hot economy that’s experiencing the highest inflation in 40 years.
Goldman Sachs raised its Fed forecast to seven consecutive 25 basis point rate hikes. Analysts at JP Morgan expects nine straight fed rate hikes until March 2023.
Interest rate changes will spill over to many facets of the economy, including mortgage rates and home sales, cost of doing business, consumer credit and consumption, savings rate and stock market movements.
The monetary policy goals of the Federal Reserve are to foster economic conditions that achieve both stable prices and maximum sustainable employment. The Feds remain divided over how aggressively to begin upcoming interest rate increases at their March meeting.
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