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  • Writer's picturePaul Gravina

What are the Odds that the Fed will Increase Rates in December

What are the odds of a fifth straight interest rate hike from the Federal Reserve? they are not great!

According to Bloomberg, the odds are just over 50%

The odds of the Federal Reserve raising interest rates again in December are high. The Fed will hold its regular two-day meeting on Wednesday and Thursday, and most economists expect a hike in the benchmark rate to 75 basis points (bps). That would be the fifth such increase this year, which is the most aggressive tightening cycle since 2004–2005 The Fed has been gradually raising rates since 2015 as it works to return monetary policy to normal, following a decade of exceptionally easy credit policies that helped fuel an economic expansion but also led to asset bubbles and inflationary pressures. There have been some concerns about the economy slowing as growth slowed in China, India, and other emerging markets. But those worries were offset by expectations for rising inflation across much of the developed world, led by rising oil prices and tighter labor markets that are forcing companies to raise wages or risk losing staff."

So as we have written about before keep your eyes on the short-term treasury bills in 6-month and 1-year durations because you can get a rate of 4.724% (at the time of this post) and that's a great rate you haven't seen for 14 years.

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