He adds: “The Fed is clearly between a rock and a hard place as it tries to battle inflation while trying at the same time to make sure that it doesn’t exacerbate the woes in the banking sector brought on by its huge rate hikes last year - the largest calendar-year hike in more than four decades.”
Vasu Menon, the executive director of investment strategy at Oversea-Chinese Banking Corporation (OCBC) is expecting the US Federal Reserve (US Fed) to raise rates by 25 basis points (bps) on March 22 as inflation remains a problem.
But like the European Central Bank (ECB) on March 16, the Fed could “offer reassurance to the markets that it will provide support, if necessary, amid the turmoil in the banking sector”, says Menon in his note on March 21.
