Fed's interest rate peak may reach 5%, Dutch Rabobank says

09/18 00:31

Rabobank said it had further raised its forecast for a Fed rate hike. For this interest rate decision, the bank's basic expectation is that the Fed will raise interest rates by 75 basis points, otherwise the possibility of raising interest rates by 100 basis points is greater than 50 basis points. Next year, the upper end of the Fed's target range for interest rates is expected to hit 5.00%, instead of the 4.50% previously forecast. This expectation is higher than the market consensus mainly because the wage-price spiral has begun, which will keep inflation going. Given that the Fed clearly prioritizes price stability over full employment, this will push the FOMC to raise rates further. The Fed’s target range for interest rates is expected to peak at 5.00% next year, with no shift expected until 2024.
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