BofAML's Harris Sees 'Good Chance' for Four Fed Hikes in 2019

The video discusses market expectations for interest rate hikes, noting a significant decrease in anticipated increases. It highlights the Fed's shift from forward guidance to data dependence, suggesting that the market may have overreacted by pricing in only one hike for the next year. The discussion covers the potential for more frequent hikes if economic data remains strong, and the possibility of the Fed overshooting its targets. The video also examines the slow pace of the current tightening cycle compared to historical norms.

What has caused the market's expectations for interest rate hikes to decrease significantly?

• The market's overreaction and the Fed's shift away from forward guidance

• A sudden increase in inflation

• The Fed's decision to cut interest rates

• The Fed's announcement of a recession

What is the Fed's current approach to deciding on interest rate hikes?

• They have committed to no hikes next year

• They are relying on data dependence

• They are using a random selection process

• They are following a strict quarterly schedule

How might market volatility affect the Fed's decision on interest rate hikes?

• It could lead to an increase in the number of hikes

• It might cause the Fed to pause hikes earlier than planned

• It will have no impact on the Fed's decisions

• It will result in a decrease in inflation

What is a typical behavior of the Fed during a tightening cycle?

• Overshooting targets slightly

• Ending the cycle at the neutral rate

• Reducing interest rates

• Maintaining a constant rate

What is the expected pace of the Fed's tightening cycle next year?

• No tightening expected

• Twice the normal speed

• Half the normal speed

• The normal speed