Macroeconomic & Geopolitical

Where Are U.S. Rates Going?

January 2022 – 3 min read

It is widely believed that the mainstream FOMC members, which includes Fed Chair Jerome Powell, belong in the dove camp. With global PMIs peaking, a tightening of monetary and fiscal policy are headwinds for the strong recovery.

The recent Federal Open Market Committee (FOMC) dot plot provided a bit of surprise, as the median dot indicates the first rate hike will come as early as in 2022. Looking at it in more detail, though, reveals two camps among committee members. One is for those who think the tightening of monetary policy is imminent and the Fed can be proactive in the face of lingering inflationary pressure. The other is for those who believe the Fed still has plenty of time to wait.

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Manabu Tamaru, CFA

Member, Fixed Income - Global Team

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