Can some one ELI5 why it’s good to have 25bp hiked but it’s not better to have 50bph or even 75bph?
so I am not sure how people keep saying it’s priced in and the market priced in a 25bph. does the market also price in a 50bph or even a 75bph? can some one ELi5 why 25bph is good but 50bph is bad and 75bph is horrible?
if the fed, is already priced in a 50bph by the end of the year (dec 2026) then it doesn’t really matter to 25bph twice or 50bph once? it’s not like inflation will change with a tiny 25bph.
when America sanctioned Russia back in 2022, j-pow went full hawk and did a 75bph, and the whole market went full melt down and we hit a bear market.
how is this time any different? USA war caused another supply/energy driven inflation. what is different that Walsh wouldn’t go full hawk like j-pow and do a 50bph or even 75bph? we had like almost 2t in data AI spending, in a sense, part of the economy is over heating, while the labour market didn’t see a penny of benefit.
on cnbc, and bloomberg YouTube, those fancy suit guys and gals keep saying the market is going to test walsh and Walsh need to stand firm and give market a signal. Isn’t it a better signal to give an unexpected 50bph? Or even a 26bph, just to tell the market they can’t test Walsh and he ultimately make his own independent decision and he will do what ever is needed to defend the confidence in USD and fight inflation, which is the core of their mandate?
why is 25bph good and 50 bph bad?