Fed to hike 2 or 3 times AND then cut once

In this week’s meetings, I’ve been telling investors that I think the Fed may raise rates 2 or 3 times this year…….

some of the family offices that I spoke with were surprised that my prediction wasn’t near the consensus of 6, 7 or 8 hikes.

I said that I needn’t not conform with the herd, for that would make for a boring meeting and hardly add any value or debate.

The bit that made them laugh, was that I also think the Fed will cut rates once around the turn of 2023.

I think that the Fed will have gone too far in their hikes and with a hard landing imminent (lower GDP growth due to higher prices resulting in a buyers strike and higher financing costs), they may need to back peddle with a supplementary cut, which funnily may coincide with a mid-term election.

After all, the Democrats recently returned Mr Powell for a new term lasting until January 2028.

March 30, 2022

by Rob Zdravevski

rob@karriasset.com.au