The Federal Reserve’s interest rate swap completely excludes the possibility of a 25 basis point interest rate hike in May

According to reports, the possibility of a 25 basis point interest rate hike in May has been completely ruled out by the Federal Reserve’s interest rate swap.

Interpretation of this information:

The message reports that the Federal Reserve’s interest rate swap has ruled out the possibility of a 25 basis point interest rate hike in May. This news indicates that the Federal Reserve may not raise rates at their upcoming meeting. The interest rate swap is one of the tools used by the Federal Reserve to gauge the probability of the policy rate change. By ruling out the possibility of the rate hike, the swap indicates that the probability of a rate hike is very low.

The decision not to raise rates in May comes at a time when inflation is running high, and the economy is showing signs of strength. While inflation has risen above the Federal Reserve’s target rate of 2%, the central bank is looking at other factors like employment and wages before making any decisions.

The Federal Reserve has been closely monitoring the pandemic’s impact on the economy and adjusting its monetary policy accordingly. The interest rate hike would affect borrowing costs across the economy, including consumer loans and mortgages. However, since the pandemic hit the global economy, the central bank cut rates to almost zero, and it has been reluctant to raise them again, given the ongoing challenges faced by the economy.

In conclusion, the message conveys the news that a 25 basis point interest rate hike in May has been completely ruled out by the Federal Reserve’s interest rate swap. This news indicates that the Federal Reserve may not be hiking interest rates at the upcoming meeting, further supporting the economy’s ongoing recovery. While inflation has been a concern, the Federal Reserve is looking at other factors before making any decisions.