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Market analysts and leading economists are closely monitoring the Fed's potential moves. Notably, the chief economist at JPMorgan Chase has publicly predicted a 100 basis point increase in July, followed by a 75 basis point hike in September. These projections reflect a consensus that the Fed is prepared to implement substantial rate hikes to combat the persistent inflationary pressures.
Implications for the Economic Outlook
The aggressive rate hikes signal a challenging road ahead for the economy. Such tightening measures tend to slow economic growth and can increase unemployment if applied too aggressively. As inflation remains stubbornly high, these measures might be necessary but also carry the risk of tipping the economy into a recession if not calibrated carefully.