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The Federal Reserve is expected to raise its key interest rate this week, but it’s unlikely to hike by 100 basis points, a massive move that would rattle investors already anxious after the August inflation report, CFRA Research said Monday.
“We think a 100 bps hike would unnerve Wall Street, as it would imply that the Federal Open Market Committee is overreacting to the data rather than sticking to its game plan,” Sam Stovall, chief investment strategist at CFRA, said in a research note.
It “would increase the likelihood that the FOMC will eventually overtighten and lessen the possibility of achieving a soft landing,” he said.
