WASHINGTON (Reuters) – The Federal Reserve is expected to raise interest rates by 0.5 percentage point on Wednesday and announce the start of a $9 trillion balance sheet reduction as it intensifies efforts to curb high inflation in the United States. .
Fed officials have been telegraphing a decision that will raise short-term interest rates to a range of 0.75% to 1%, in addition to starting a plan to reduce its portfolio of Treasuries and mortgage-backed securities (MBS) by up to 95 billion dollars a month.
The announcement will be released at 15:00 (Brasília time).
Markets have been pricing in further rate hikes this year and next, including at least two more 0.5-percentage hikes, with traders betting the central bank will move much faster than it had anticipated in March to raise borrowing costs. loan to the point where they will start to reduce inflation.
With no further economic or interest rate forecasts until the Fed’s June meeting, most clues as to how far and how quickly the central bank will act will come from Fed Chair Jerome Powell’s press conference half an hour after the release. of the communiqué.