Fed-funds rate could end up as high as 5%, says overseer of $1.3 trillion in assets
In the run-up to Wednesday’s policy announcement by the Federal Reserve, SEI, an overseer of $1.3 trillion in assets, sees a likelihood that the central bank’s hiking cycle will end at a level that leaves interest rates twice as high as they are now.
The Oaks, Pennsylvania-based firm sees a “reasonable base case” that the level at which Fed officials will stop hiking rates is between 4.5% to 5%, according to chief market strategist Jim Solloway. That’s double the current level between 2.25% and 2.5% and above the 4.25% to 4.5% range that traders are mostly expecting for year-end, though it’s not far from where market expectations are increasingly heading for next year, according to the CME FedWatch Tool.
2-year Treasury yield surges above 4.1% after Fed hike, highest level since 2007
Small Business Confidence Drops Bigly
The largest drop in small business confidence since the start of the pandemic is being driven not by concerns about spreading COVID-19, but concerns over record inflation. The future doesn’t look great.
Tom Sullivan, vice president of small business policy with the U.S. Chamber of Commerce, said while the pandemic mitigations were among the leading concerns this time last year, things have changed.
“Is the pandemic there or not, if it is, it’s hidden pretty deeply behind this massive thing called inflation which is front of mind for every business owner,” Sullivan told The Center Square.
Bidenflation Costing Average Family $11.5K
Americans are set to pay an extra $11,500 this year if they want to enjoy the same standard of living they maintained in 2020, according to new estimates from NerdWallet.
The estimates, published in August, were based on inflation and annual spending data from the U.S. Bureau of Labor Statistics (BLS). Analysts at the personal finance company looked at how spending would compare this year to 2020, when the COVID-19 pandemic began.
Analysts said 2020 was the “last full year when inflation was relatively stable.” In that year, the U.S. inflation rate was 1.23 percent.
As of August, inflation in the United States stands at 8.3 percent, according to BLS data.
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