Moody’s Analytics says Fed unlikely to hike rates in March; While Jeffrey Gundlach says Fed will hike rates to save credibility.

Moody’s Analytics’ Mark Zandi says Fed unlikely to hike rates in March given banking turmoil

Moody’s Analytics chief economist Mark Zandi thinks the Federal Reserve is unlikely to raise interest rates at its March meeting as there is a “boatload of uncertainty” around the recent bank failures.

The financial turmoil of the past few days will certainly affect monetary policy decision making when the Federal Open Market Committee meets next week, he added.

“I think they’re focused on the bank failures that roiled the banking system and markets over the last couple of days,” Zandi told CNBC’s “Street Signs Asia” on Wednesday.

“There’s a boatload of uncertainty here,” as a result the Fed will want to be cautious, he added. “I think they’re going… [to] decide not to raise interest rates at the meeting next week.”

Jeffrey Gundlach says Fed will hike funds rate next week to save credibility

DoubleLine Capital CEO Jeffrey Gundlach believes that the Federal Reserve will still pull the trigger on a small rate hike next week despite the ongoing chaos in the banking sector that prompted extraordinary rescue action from regulators.

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“I just think that, at this point, the Fed is not going to go 50. I would say 25,” Gundlach said on CNBC’s “Closing Bell” Monday. To save the central bank’s “credibility, they’ll probably raise rates 25 basis points. I would think that that would be the last increase.”

“This is really throwing a wrench in [Fed Chair] Jay Powell’s game plan,” Gundlach said. “I wouldn’t do it myself. But what do you do in the context of all this messaging that has happened over the past six months, and then something happens that you think you’ve solved.”

Source:

Moody’s Analytics’ Mark Zandi says Fed unlikely to hike rates in March given banking turmoil. While DoubleLine Capital CEO Jeffrey Gundlach predicts the Fed will still hike the rates by 25 bps to save credibility but that would be the last increase.

Do you think the Fed will still hike rates next week despite of the ongoing pressures on the banking sector?

h/t predictany007

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