Analysis: Investors bet Fed will blink if recession hits despite 'higher for longer' mantra

Some investors believe an expected recession will force the Federal Reserve to loosen monetary policy next year, even as the central bank projects it will raise rates higher than it previously anticipated and keep them there longer as it fights to crush inflation, Qazet.az reports.

The dynamic came into stark focus after the Fed's monetary policy meeting on Wednesday, when it delivered a widely expected 50 basis point rate increase and projected borrowing costs will rise by an additional 75 basis points by the end of 2023 - half a percentage point higher than officials forecast in September.