Wall Street is expecting a quarter-point rate increase from the Federal Reserve today, despite ongoing concerns about the financial sector and potential recession. The current rate stands at 4.5%, reflecting expectations for the central bank to slash policy rates by at least 0.50 percentage point in the near future.
The fed-funds rate is projected to fall below 4% within the next year, raising worries that a drag on lending will force the Fed to consider the severity of an impending recession. As investors anticipate this interest rate hike to be potentially final in its tightening cycle, analysis by CNBC Pro reveals that stock markets typically receive a boost between one month and twelve months following such cycles' end.
In fact, according to CNBC Pro's report, S&P 500 averaged an 8% gain three months post-final-rate-hike and experienced a substantial return of around 21% after twelve months.
Despite these figures suggesting economic growth may follow these adjustments, economists predict that slowing labor markets are already under way thanks to continued Fed rate hikes — with April's jobs report expected to confirm as much alongside cooling economy indicators.
As major banks collapse amid lingering fears over delayed impacts on further increases in interest rates, pressure mounts for more cautious approaches moving forward.
Nevertheless, Wednesday saw another announcement from The Federal Reserve confirming yet another interest rate hike — once again prompting concern among investors who predict possible lowering target rates by up-to full-percentage-points before year-end predictions roll around when it comes down balancing inflation against both economic slowdowns caused through banking turmoil across various sectors throughout our nation’s history so far!
The recent signs of slowing inflation coupled with softening labor markets have led some economists and politicians alike urging caution against additional tightening measures being implemented too soon or aggressively out fear they could backfire instead causing even greater harm than good overall going forward into uncertain territory where many unknown variables still exist at play today including global trade wars impacting multiple industries adversely worldwide among others here domestically within our own borders such as political unrest ahead midterm election season fast approaching later this fall just around corner only time will tell which direction things ultimately head next…