Market Commentary

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Penultimate?

by Guy LeBas December 14, 2022
The Federal Reserve Open Market Committee raised their target for overnight interest rates 0.50%, as widely expected and as telegraphed by Fed Chair Jay Powell in a recent speech.

The rate hike, while still above the “normal” 0.25% move, represents a reduction in the breakneck pace of policy tightening in 2022 that included four consecutive 0.75% rate increases beginning in June. Today, overnight policy rates are in a range of 4.25–4.50%, which the majority of economists and Fed participants consider firmly in restrictive territory, meaning that interest rates are actively reducing economic growth even if they do not increase further. Today could represent the penultimate rate hike of the current cycle, depending on the evolution of inflation before the Fed next meets in February.

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This report is produced by the Janney Investment Strategy Group (ISG). It is the intellectual property of Janney Montgomery Scott LLC (Janney) and may not be reproduced, distributed, or published by any person for any purpose without Janney’s express prior written consent. This report is to be used for informational purposes only. In no event should it be construed as a solicitation or offer to purchase or sell a security. The information presented herein is taken from sources believed to be reliable but is not guaranteed by Janney as to accuracy or completeness. Any issue named or rates mentioned are used for illustrative purposes only and may not represent the specific features or securities available at a given time. Preliminary Official Statements, Final Official Statements, or Prospectuses for any new issues mentioned herein are available upon request. The value of and income from investments may vary because of changes in interest rates, foreign exchange rates, securities prices, market indexes, as well as operational or financial conditions of issuers or other factors. Past performance is not necessarily a guide to future performance. For investment advice specific to your situation, or for additional information on this or other topics, please contact your Janney FA and/or your tax or legal advisor.

About the author

Guy LeBas

Director, Custom Fixed Income Solutions

Read more from Guy LeBas

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Penultimate?

by Guy LeBas December 14, 2022
The Federal Reserve Open Market Committee raised their target for overnight interest rates 0.50%, as widely expected and as telegraphed by Fed Chair Jay Powell in a recent speech.

The rate hike, while still above the “normal” 0.25% move, represents a reduction in the breakneck pace of policy tightening in 2022 that included four consecutive 0.75% rate increases beginning in June. Today, overnight policy rates are in a range of 4.25–4.50%, which the majority of economists and Fed participants consider firmly in restrictive territory, meaning that interest rates are actively reducing economic growth even if they do not increase further. Today could represent the penultimate rate hike of the current cycle, depending on the evolution of inflation before the Fed next meets in February.

Continue to read full PDF

This report is produced by the Janney Investment Strategy Group (ISG). It is the intellectual property of Janney Montgomery Scott LLC (Janney) and may not be reproduced, distributed, or published by any person for any purpose without Janney’s express prior written consent. This report is to be used for informational purposes only. In no event should it be construed as a solicitation or offer to purchase or sell a security. The information presented herein is taken from sources believed to be reliable but is not guaranteed by Janney as to accuracy or completeness. Any issue named or rates mentioned are used for illustrative purposes only and may not represent the specific features or securities available at a given time. Preliminary Official Statements, Final Official Statements, or Prospectuses for any new issues mentioned herein are available upon request. The value of and income from investments may vary because of changes in interest rates, foreign exchange rates, securities prices, market indexes, as well as operational or financial conditions of issuers or other factors. Past performance is not necessarily a guide to future performance. For investment advice specific to your situation, or for additional information on this or other topics, please contact your Janney FA and/or your tax or legal advisor.

About the author

Guy LeBas

Director, Custom Fixed Income Solutions

Read more from Guy LeBas

Related Articles

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