SINGAPORE (Mar 21): The US Federal Reserve is widely expected to hike the federal funds rate by 25 basis points (bps) to between 1.5% and 1.75% tonight.

The CME FedWatch Tool calculates an 88.8% probability of a hike, based on Fed Fund futures contract prices. Yet equity, bond and currency markets do not seem particularly agitated.

Following a strengthening of the FOMC’s language regarding inflation, the yield curve had steepened sharply as at end Jan. The yield on the 10-year US Treasury bond rose as high as 2.951% on Feb 21, triggering a decline in equity indices and a rise in volatility.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Related Stories

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook