By: Angela Palumbo, Originally published in Barron’s

Traders will be looking for clues on the future of monetary policy when minutes are released Wednesday from the Federal Reserve’s May meeting.

Inflation has soared to record highs over the last two years, and the Fed has raised interest rates ten times to try and curb these historical prices. The question on everyone’s mind: will the Fed raise interest rates again?

As of right now, most traders think the Fed will pause its current path of monetary policy. According to the CME FedWatch Tool, 73% of traders are anticipating the Fed will hold rates steady when it meets in June.

Minneapolis Fed President Neel Kashkari recognized in an interview with The Wall Street Journal on Sunday that the Fed isn’t done hiking rates, but would be open to a pause “to get more information.

Fed Chairman Jerome Powell also recently made remarks that have led people to anticipate a pause. He said last week that developments in the U.S. banking sector “are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation.

“As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals,” Powell said.

However, a pause in June is far from certain, and the outlook for future meetings is even less clear. St. Louis Fed President James Bullard said Monday that he anticipates two more interest rate hikes this year.

“The labor market is still very strong and unemployment remains at historic lows. As of right now we do not expect the Fed to start reversing rates until at least the 4th quarter or beyond,”

Arthur Laffer Jr., president of Laffer Tengler Investments, wrote.

As published on


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