IT is inevitable that the US Federal Reserve (Fed) will raise the benchmark federal funds rate this year, the question is when and how many times. The Fed had guided for three hikes this year with the next one in June, but remarks by various Fed officials have been hawkish for a rate hike as soon as this month when the Federal Open Market Committee meets in mid-March.
The Fed last raised interest rates in December to a range of 0.50% and 0.75%. The probability of the next 25-basis point hike as tracked by prices of the federal funds futures have risen to as high as 80% earlier this week reflecting newsflow and at press time, the probability was at 77.5%.
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