Know The Difference Minute

Will a 50 basis point hike slow down consumer demand and cool off red-hot inflation?

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The Fed makes the move.
Welcome to the Know the Difference Minute for Wednesday, May 4th.
Can the Fed pull off an economic soft landing by raising interest rates enough to slow down consumer demand and cool off red-hot inflation?
We’ll see. Today’s announcement of a 50-basis point hike is a step toward the goal. It’s the largest jump in 22 years and follows March’s 25 point hike. Next question, how many 50’s will we see this year? Powell said June and July are on the table. Current market pricing has the rate rising to 3%-3.25% by year’s end.
The Fed will also begin shrinking its nearly $9 trillion balance sheet in June. That move will tighten credit for US households.
It would be great to stick the landing. Inflation hit a 40-year high in March. GDP in the 1st quarter shrank to early-COVID levels.
I’m Dave Spano from Annex Wealth Management. That is your Know the Difference Minute.