While many banks think the Federal Reserve will hold off from a truly supersize rate rise on Wednesday, fearful of what such an unexpected action could do to markets and the broader economy, some believe the central bank may need to surprise with an aggressive move in the wake of bad inflation news.
Investment banks Jefferies, Barclays , Goldman Sachs and J.P. Morgan told clients in research notes over recent days they now believe the Fed will boost the federal-funds target rate range, now between 0.75% and 1%, by three quarters of a percentage point at the Federal Open Market Committee meeting on Wednesday. A move of that size would equal the Fed’s two rate rises this year, in March and May.
