Fed Pivot Unlikely as Inflation Fight continues: Barclays

• Barclays says that the Federal Reserve won’t show any signs of abandoning its rate-hiking campaign at its meeting this week.
• Investors believe that the US central banks will loosen up on tightening in order to encourage stocks to rise.
• The Fed could signal that it will raise rates by another 75 basis points in December.

Barclays reports that the Federal Reserve won’t show any signs of slowing down its aggressive rate-hiking campaign after its November meeting ends Thursday.

According to strategists, the US central bank will raise interest rates by 75 basis point this week. However, it has the option of implementing another jumbo-sized rate increase at its December meeting.

“The Fed seems almost certain to raise rates by 75 basis point this week,” Ben McLannahan (bank’s vice president for research) said in Monday’s research note. 

The analysts stated that as such, the focus of the meeting will likely be on signaling the December meeting. “Our US economists believe that the US will be a good place to start. [Fed chair Jerome]Powell stresses data dependence and allows for optionality to be maintained until 2022, at 75 basis points.

In an attempt to control soaring prices, the Fed has already raised interest rates by 75 basis point at three consecutive meetings. inflation hitting 8.2% last month.

Additional large-scale hikes in November or December would raise the US central banks’ federal fund rates to between 4.75 and 5.5%.

Powell has focused on the Fed’s data-driven approach to press conferences. Inflation shows no signs of slowing down and is not expected to slow. White-hot labor marketThe central bank has the ability to raise rates aggressively, without affecting employment statistics.

Barclays economists anticipate Friday’s nonfarm payrolls data will show that the US economy added 175,000 jobs during October.

That would represent a fall from September’s 263,000 figure — but “still be strong enough to keep the Fed on the hawkish side”, McLannahan’s team said.

Barclays’ prediction about the Fed raising rates aggressively to the end of the year contradicts the views of other Wall Street majors who have been more bullish in recent weeks.

Mike Wilson, Morgan Stanley’s top stockpicker said Monday that he anticipates a pivot.Do it sooner than you think!“, which caused him to repeat his forecast for the S&P 500It will rise 6.4% from its current level.

Learn more Mike Wilson, Morgan Stanley’s Head of Research, says that the Fed will stop increasing interest rates’sooner than later’ in order to support stocks’ rise by his predicted 6%