What kind of hikes could be potential following FOMC Minutes?

Two more 25 bps rate hikes in March and May could result in a terminal 5.00%-5.25% by May. The FOMC meeting minutes provided additional information about the Fed’s committee’s decision to hike rates by 25 bps in February.

Economists are now looking forward to a 5.25% terminal rate at the May meeting. Fed is likely to keep policy restrictive for longer. The minutes signaled that the FOMC is not done yet in terms of further rate hikes, and it is looking to maintain a restrictive policy stance for the foreseeable future.

Economists expect 25 bps rate hikes in March and May, with the Fed settling on a terminal Fed funds target rate range of 5.00%-5.25% by May.

However, it will remain important to observe for the upcoming releases on CPI and PCE inflation, as well as the labour market, as these factors together could very well drive the Fed to continue to hike beyond the May meeting.