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Largest Fed hike since 1994

The Federal Reserve raised the federal funds target range by 75bp to 1.50-1.75 per cent.
16 June 2022
    Download the full reportPDF, 1.09MB

    Key takeaways:

    • The Federal Reserve raised the federal funds target range by 75bp to 1.50-1.75 per cent
    • Chair Powell flagged up a further 50-75bp hike as likely in July with the funds rate expected to end the year around 3.00-3.50 per cent, consistent with policy becoming restrictive
    • Despite the improvement in valuations we think a cautious asset allocation makes sense at this point, given the emergence of meaningful recession risks amid stubborn inflation and accelerated policy tightening