Liftoff - March 2022
As expected, the Federal Reserve raised interest rates by 0.25% at their meeting Wednesday, March 16th. The median dot plot, the forward view of rate increases projected by policymakers, now expects six additional hikes in 2022 and 3-4 in 2023, resulting in a terminal rate of 2.75% in 2023. After Wednesday’s news, on Thursday morning, the Bank of England continued on their tightening path, raising rates another 0.25%, for the third meeting in a row, to a current level of 0.75%. With two major Central Banks actively in the tightening phase of monetary policy, expectations for action by the European Central Bank have been pulled forward, and at least one rate increase is expected from them by the end of 2022.