Expectations on the Fed’s next move for interest rates have been a mixed bag in recent weeks. From bets on a 50-basis point hike, to no hike at all, to a view of a 25 basis point rate hike.
The expectation whiplash kicked into high gear after the sudden bank failures- sending a wave stress throughout the banking system.
“The Fed is going to have to be really careful about forward guidance here and potentially not give a whole lot of it because they're not omnipotent. They don't know what's coming down the pike,” says Chris Konstantinos, RiverFront Investment Group Chief Investment Strategist.
Markets will be eager to see the Fed’s tone as they face tensions on financial stability and the risk of inflation.
“They have to strike a balance. I think if their message is too far towards price stability, or to much towards financial stability, or inflation stability- too much in either direction- I think is going to be tough for the market to take,“ says Konstantinos
Key video moments:
00:00:14 Fed guidance
00:00:52 Fed striking a balance
00:01:21 Rate hike pause