A 50bps March Fed rate hike is warranted – Bloomberg Economics

Dhwani Mehta FXStreet

A 50-basis point (bps) interest rate hike is warranted at the Fed’s March meeting, Anna Wong, Chief US Economist for Bloomberg Economics said on Wednesday.

“Our in-house model of a Fed reaction function -- the Bloomberg Economics rule ("BE rule") -- suggests that a 50 basis-point rate hike at the March meeting is warranted, followed by another five 25 basis-point rate hikes the rest of the year,” she explained.

Amid increased speculation the Fed will deliver more than a 25-bps rate hike in March, the US Treasury yields skyrocketed on Tuesday amid a meltdown in the government bond yields.

The benchmark 10-year yields rose to the highest level since January 2020 at 1.89% in early Asian dealings, currently trading at 1.882%, still up 0.77% on the day.

US dollar and yields keep the fire burning in otherwise subdued markets

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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