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The Fed 'Will Blink' on Rates

Written by Staff Writer
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dollar 1362243 640Jim Grant predicts the Fed 'will definitely blink' on interest rates -CNBC
"The Federal Reserve won't end up raising interest rates as aggressively as projected, said Jim Grant, editor and founder of the venerable Grant's Interest Rate Observer newsletter. 'I think the Fed will definitely blink,' Grant told CNBC on Tuesday. 'I don't know when it will reverse course; I suspect sooner rather than later.' Grant said that investors will know the Fed is 'blinking' when they hear it. 'We are going to be data dependent; we are concerned about where growth [is]; we are stepping back from time to time ... and we are watchful waiting.

That is what it is going to sound like.' The recent sell-off started after Fed Chairman Jerome Powell said early last month that rates were a long way from neutral, sparking questions about whether Fed officials were going to increase the cost of borrowing money more than forecast. The Fed is expected to raise rates again in December, on top of the three moves already on the books in 2018. After its most recent hike, the Fed projected three rate increases for next year."