And there it is. Fed raises rate 0.75%

[JoeWras]

https://www.wsj.com/articles/fed-ra...point-largest-increase-since-1994-11655316170

Officials agreed to a 0.75-percentage-point rate rise at their two-day policy meeting that concluded Wednesday, which will increase the Fed’s benchmark federal-funds rate to a range between 1.5% and 1.75%.

 

[Dtail]

And the equity markets will continue to fall.

 

[ShokWaveRider]

And the equity markets will continue to fall.

Time will tell, I was surprised that they were positive right after the announcement. But as we all know the real answer will come 30 minutes from the close, as it does pretty much every day.

 

[JoeWras]

The thing is that this raise doesn't even get us to long term average yet. Not that I'm asking for 1% raise or anything, rather I think the markets are reflecting the fact they are not surprised by this.

But yeah, let's see what happens starting 3:30 or so.

 

[Aerides]

Markets knew this so it should be baked in.

 

[target2019]

Divining the markets, or something like that.
At 2:30PM a tremendous lift, but by 3:00PM NAV has retreated. More turmoil to come, I fear.

 

[Dtail]

Time will tell, I was surprised that they were positive right after the announcement. But as we all know the real answer will come 30 minutes from the close, as it does pretty much every day.

Perhaps will end the day up, but my reference was that this bear market is not done yet.

 

[cyber888]

0.75% Fed Rate Hike - Looks like Market is responding well

Looks like the Stock Market responded well to the Fed's 0.75% rate hike, as a step to curtail inflation. It's green. Hope it does not reverse tomorrow

 

[daylatedollarshort]

The WSJ leaked the news of the increase to .75% instead of .50% a couple of days ago, so that is when the market turmoil happened.

 

[Freedom56]

The rate increase was priced in and the positive response was more due to the statement "I do not see moves of this magnitude as common going forward". The target Fed funds rates was revised up but below the 4.1% that the market priced in early in the week. I have been aggressively buying corporate notes this week as I moved cash from money market accounts to my brokerage account. Some of the sell-off was ridiculous such as June 2023 4.75% Seagate Technology notes with a YTM of 6.7%. I would have been irresponsible if I didn't buy it. The risk of default is nil. I also bought some Western Digital notes 2026 notes. There is a lot of low coupon debt that bond funds are holding which will keep distributions low. So it makes more sense to buy a risk free CD or treasury note yielding more than a typical bond fund. I'm going to continue to buy short term corporate notes with maturities from 2024-2026 as investors dump their investment grade bond funds in favor of treasury notes and CDs. As I stated early in the year, 2022 will be a great year to add to your fixed income ladder with treasury notes, CDs, corporate notes, and muni bonds.

 

[GenXguy]

Market closed up, 1.46% for the S&P 500.

 

[JoeWras]

Yep, no surprise for the markets.

Maybe even relief. I know I'm relieved. Inflation is a retirement killer, glad to see the Fed finally taking it seriously.

 

[teejayevans]

Looks like the Stock Market responded well to the Fed's 0.75% rate hike, as a step to curtail inflation. It's green. Hope it does not reverse tomorrow

Actually it drop for a little bit before going back up.

 

[audreyh1]

Wow!it’s been a very, very long time since the Fed raised rates 0.75%!

 

[JoeWras]

And there's a good chance we'll get another next month. That's a long way away from 0.25 raises which were being telegraphed on a few months ago.

 

[audreyh1]

Supposedly Fed language indicated no repeat next month which calmed the markets.

 

[Koolau]

Wow!it’s been a very, very long time since the Fed raised rates 0.75%!

Yep, so long ago that Bill Clinton was President. That's half my adult life ago. YMMV

 

[JoeWras]

Supposedly Fed language indicated no repeat next month which calmed the markets.

Whoops, I think I read the report backwards.

Edit:. Okay, I found his quote. It is wishy washy.

“Clearly, today’s 75-basis-point increase is an unusually large one, and I do not expect moves of this size to be common,” Mr. Powell said. “From the perspective of today, either a 50-basis-point or a 75-basis-point increase seems most likely at our next meeting”

 

[madatrub]

Whoops, I think I read the report backwards.

Edit:. Okay, I found his quote. It is wishy washy.

“Clearly, today’s 75-basis-point increase is an unusually large one, and I do not expect moves of this size to be common,” Mr. Powell said. “From the perspective of today, either a 50-basis-point or a 75-basis-point increase seems most likely at our next meeting”

"After this one, and the next one, and maybe the next one, I do not expect moves of this size"

 

[Graybeard]

Wow!it’s been a very, very long time since the Fed raised rates 0.75%!

CNBC reported it was 1994 when the last time there was a 75 bp increase. I wish they'd do another 75 in July, the only way this mess is going to get resolved is to stop inflation. Just rip the band aid off and get it over with. Maybe another 75 in September?

 

[SecondCor521]

I wondered idly today if part of the reason for the 75bps today is that there is apparently no August meeting (due to Jackson Hole?). I also sense a distaste for the Federal Reserve to do so-called "emergency" rate hikes between meetings. <shrug>

 

[gromit]

I wondered idly today if part of the reason for the 75bps today is that there is apparently no August meeting (due to Jackson Hole?). I also sense a distaste for the Federal Reserve to do so-called "emergency" rate hikes between meetings. <shrug>

The FOMC meetings are usually scheduled 6-8 weeks apart. August gets skipped because the July meeting is late in the month. However, the September meeting is 8 weeks, so maybe the extra weeks in September have to do with the Jackson Hole meeting or some other conflict. The schedule for the whole year gets published on the Fed's Board of Governors website before the year begins.

 

[teejayevans]

They should have done this a year ago…I don’t see a soft landing in our future.
They’re hoping the markets help them out by crashing, otherwise they’ll need a lot more of 3/4 point hikes.

 

[Montecfo]

I wondered idly today if part of the reason for the 75bps today is that there is apparently no August meeting (due to Jackson Hole?). I also sense a distaste for the Federal Reserve to do so-called "emergency" rate hikes between meetings. <shrug>

They are just trying to give teeth to their jawboning. To show they are "serious". The Fed schedule did not change and was reflected in the dots previously.

 

[jollystomper]

So how quickly will the interest on bank savings/money market accounts rise?