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Fed ups the pace of tightening

At the May meeting, the Federal Reserve (Fed) raised the federal funds target range by 50bp to 0.75-1.00 per cent
05 May 2022
    Download the full reportPDF, 1.09MB

    Key takeaways:

    • At the May meeting, the Federal Reserve (Fed) raised the federal funds target range by 50bp to 0.75-1.00 per cent
    • The FOMC also announced it will begin reducing its holdings of USTs and MBS from June 1st with the pace of run-off increasing after three months
    • Chair Powell stated that the FOMC aims to raise the policy rate “expeditiously” towards more normal levels with further 50bp hikes “on the table” for the “next couple of meetings”
    • We think a defensive allocation remains appropriate against a backdrop of brisk policy normalisation, which means a selective approach within a neutral stance on global equities