Fed steps up inflation fight with big rate hike By Reuters

Written by Anne Safir

WASHINGTON (Reuters) – The U.S. dollar is expected to raise 0.5 percentage points on Wednesday and announce the start of a $9 trillion balance sheet cut, as it ramps up efforts to curb high inflation in the United States.

Check out: Federal Reserve Interest Rate Monitor

Fed officials sent a decision to raise short-term interest rates to a range of 0.75% to 1%, as well as initiating a plan to reduce its portfolio of Treasuries and mortgage-backed securities (MBS) by as much as 95 billion. dollars a month.

Announcement will be released at 15:00 (Brasilia time).

Markets have been pricing in further rate hikes this year and next, including at least two additional 0.5% increases, as traders are betting the central bank will move much faster than expected in March to raise borrowing costs. It will start to reduce inflation.

With no further economic outlook or interest rates until the Fed’s June meeting, most clues about the extent and speed of the central bank’s action will come from Fed Chairman Jerome Powell’s press conference half an hour after the statement was released.