Fed Swaps Price In 5.25% Peak for Policy Rate in June 2023
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The expected peak in the Federal Reserve’s policy rate implied by swap contracts briefly increased to 5.25% Friday, the June 2023 contract’s value, after stronger-than-expected October employment data.
Expectations for the scope of the US central bank’s campaign to restore price stability have been increasing since its last rate action on Nov. 2, a three-quarter-point increase to a 3.25%-4% range. Fed Chair Jerome Powell that day said that with inflation still elevated a pause isn’t likely any time soon. The expected peak was below 4% as recently as early September.