With inflation pressures showing no signs of abating, economists see the Federal Reserve on auto-pilot this week, delivering a 0.75 percentage point rate hike to push its benchmark rate up to 2.25 — 2.5%. The expected move will put the pace of Fed tightening at the fastest pace since early 1981. It meets the Fed’s first goal of getting the benchmark rate back to a historic “neutral” setting that doesn’t spur the economy.
Here are four things that economists and investors will be listening to after the Fed meeting and at Fed Chairman Jerome Powell’s press conference.What about September? Forward-looking markets are already debating whether the expected rate hike in September is a half percentage point move or another 0.75 percentage point hike. Will Powell be explicit about the size of the upcoming move, as he did at the last two press conferences? Economists at Deutsche Bank think Powell will issue similar guidance, which is that Fed officials “will likely decide between a 50bp and a 75bp move in September.” The Fed’s next policy …