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April 29, 2022 | The Fed: To Hike – or Not to Hike in May

Robert Campbell

Robert Campbell is a real estate analyst and economist. He's been publishing The Campbell Real Estate Timing Letter since 2002. His book (Timing the Real Estate Market) presents a clearly defined method for predicting the peaks and valleys of real estate cycles.

 

 

To fight inflation, the Fed hiked short-term interest rates by 0.25% in March – and they are expected to hike rates by another 0.5% when the Fed meets next on May 3rd.

 

Does the Fed keep raising rates because inflation is at 8.5% and rising?

Or does the Fed stop raising rates because of today’s announcement that the U.S. economy CONTRACTED by -1.4% in Q1 2022 – and that a recession and job losses are now in the cards?

Kill Inflation – or Kill the Economy?

Due to the prospect of higher rates ahead, the Dow Jones Industrial Average (DJIA) has fallen 11% since it hit an all-time high in January 2022.

The fact that the DJIA climbed by 614 points (1.88%) today – which was the same day the -1.4% negative GDP statistic was announced – could be our best clue.

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