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MNI FED WATCH: Debate Over December Rate Downshift In Focus

(MNI) WASHINGTON

The FOMC is expected to raise interest rates by 75 bps for a fourth straight meeting this week.

The Federal Reserve is expected to raise its benchmark interest rate by 75 basis points Wednesday to a target range of 3.75%-4%, and debate whether to scale back the size of its next hike in December as rates approach their projected peak.

Investors are currently pricing in a 50-50 chance of a smaller 50 bp increase in December, in anticipation that the FOMC may decide to slow down and monitor the effects of its actions so far. Some lawmakers have urged Chair Jerome Powell to pause rate hikes before job growth slows, while former Fed Governor Randal Quarles and others have warned rate hikes are more potent now due to extensive debt levels.

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The Federal Reserve is expected to raise its benchmark interest rate by 75 basis points Wednesday to a target range of 3.75%-4%, and debate whether to scale back the size of its next hike in December as rates approach their projected peak.

Investors are currently pricing in a 50-50 chance of a smaller 50 bp increase in December, in anticipation that the FOMC may decide to slow down and monitor the effects of its actions so far. Some lawmakers have urged Chair Jerome Powell to pause rate hikes before job growth slows, while former Fed Governor Randal Quarles and others have warned rate hikes are more potent now due to extensive debt levels.

Keep reading...Show less