Economist at UOB Group Lee Sue Ann comments on the imminent FOMC event and the prospects for the rest of the year.

Key Takeaways

“The risk of more aggressive Fed rate action is seen to be fulfilled by the accelerated inflation path, affirmed by the 8.5% price spike in Mar. As such, we expect the FFTR to be hiked faster by 50bps in the May FOMC.”

“We expect 25bps in every remaining meeting of this year but note the risk of 50bps hikes in Jun/Jul. Including the Mar FOMC’s 25bps hike, this implies a cumulative 200bps of increases in 2022, bringing the FFTR higher to the range of 2.00-2.25% by end of 2022.”