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- Fed: Key interest rate to peak at 5.00% in Q1 2023 – Commerzbank
Fed: Key interest rate to peak at 5.00% in Q1 2023 – Commerzbank
The Federal Reserve in September raised key interest rates by 75 basis points for the third time in a row. The upper bound of the target corridor now stands at 3.25%. The Fed is expected to raise it to 5.0% by the end of the first quarter, according to economists at Commerzbank.
Fed is stepping on the brakes hard
“We expect another big 75 bps rate hike at the meeting in early November. By the end of the year, the key interest rate should stand at 4.50% and peak at 5.00% in the first quarter of 2023. We have thus raised our forecasts for the fed funds terminal rate.”
“Despite the recession expected in the US in the first half of 2023, the Fed is likely to be reluctant to cut key rates again quickly due to stubborn inflation. We do not expect this until towards the end of 2023.”
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