In the Asian session on Wednesday (March 22), the U.S. dollar index rose, with the latest price of the U.S. dollar at 103.24, an increase of 0.02%. Economist David Merrick said that the collapse of Silicon Valley Bank and Signature Bank is the most important factor hindering the Fed from raising interest rates. The banking crisis has made it difficult for the outside world to raise interest rates. Until the situation calms down, the Fed will temporarily pause the process of raising interest rates.
Mark Hackett said the bond market is pricing in a pause in rate hikes at this week’s meeting, while the stock market is pricing in a 25 basis point hike. Expect a panic reaction from stock and bond investors if the Fed pauses in tightening monetary policy. Whether the Fed will pause rate hikes, however, remains elusive.
Some research institutions said that the Fed’s multiple actions suggested that the outside world’s concerns about the contagion of banking risks may increase to a certain extent, and the market may face more doubts about the Fed’s expectation of raising interest rates this week. Expectations of a pause in interest rate hikes are rising, which also suggests that the Fed may pause its balance sheet reduction.
