Fed: 50 bps rate hike and balance sheet reduction on the table – Scotiabank

Analysts at Scotiabank believe that “a half-point hike in the fed funds target range to 0.75%–1.0% is expected alongside the implementation of plans to shrink the balance sheet.”

Additional quotes

“A move other than a half percentage point hike would be a surprise to markets.”

“One thing to watch for would be any signs of a shift in the explanation of the drivers of inflation toward something that is now believed to be longer-lived.”

“Nothing in the March dot plot indicates that the Fed plans on pausing rate hikes any time soon.”

“The direction of risks to inflationary pressures remains pointed higher and is likely to result in Chair Powell maintaining a hawkish stance.”

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