Investors Discuss the Fed's Latest Rate Hike

Investors Discuss the Fed’s Latest Rate Hike

Plus we interview Pubmatic CEO Rajeev Goel.

In this podcast, Motley Fool senior analyst Ron Gross discusses: The positive reaction in the stock market to the Fed’s move.

Prospects for much lower inflation in 2023.

Borrowing costs going higher.

Expectations for more rate hikes later this year.

Motley Fool senior analyst Asit Sharma talks with Pubmatic ( PUBM 3.22%) CEO Rajeev Goel about why his company is becoming more predictably profitable, and the growing opportunity in connected TV.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center . To get started investing, check out our quick-start guide to investing in stocks . A full transcript follows the video.

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Playback RateChapters Chapters Descriptions descriptions off, selected Captions captions settings, opens captions settings dialog captions off, selected Audio TrackFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteTransparencyOpaqueBackgroundColorBlackTransparencyOpaqueWindowColorBlackTransparencyTransparentFont Size100%Text Edge StyleNoneFont FamilyProportional Sans-SerifReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button. 10 stocks that could be the biggest winners of the stock market crash When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*They just revealed what they believe are the ten best buys for investors right now… And while timing isn’t everything, the history of their stock picks shows that it pays to get in early on their best ideas. *Stock Advisor returns as of June 2, 2022 This video was recorded on June 15, 2022. Chris Hill: It’s the biggest interest rate hike since 1994. What it means for businesses is coming up next. Motley Fool Money starts now. I’m Chris Hill and I am joined by Motley Fool Senior Analyst Ron Gross. Thanks for being here. Ron Gross: Yeah, my pleasure, Chris. Chris Hill: Let me time stamp this because normally we record this podcast earlier in the day. It is 2:49 PM on the East Coast and we’re recording much later than usual because of the Fed. Because at two o’clock this afternoon, the Fed came out with what we thought was going to happen, which is always comforting. I find with the Fed coming out and saying, ‘We’re raising interest rates 0.75 percent.” I think that’s what most people were expecting and what most people were looking for. The headline, of course, is, that this is the biggest rate hike in 20 years. We’ll get into some of the particulars in a minute. But I couch that by saying most, is this what you expected as well? Ron Gross: The market had a 95 percent chance had it placed that bet, that it would be 75 basis points. As I said to our Chief Investment Officer this morning, the safe bet is that 75 percent basis points will be the number. We said back and forth, if it’s 50 basis points, the market is going to be down four percent. If it’s a 100 basis points, then you’re up to the whims of the market because you can get some people saying, “Yeah, way to go Fed. Way to rip the band-aid off. Let’s get this done” and then you get the other half going “This is much worse than we thought it would be.” I wouldn’t even know how to predict what would happen if they’ve gone to 100-basis-points. Just recently, they were saying 50 and that 75 wasn’t really on the table. That gives you some indication of the need that they feel, to really be aggressive here. If you look at their expectations right now, that benchmark funds rate is at 1.5-1.75, that’s after this raise, this increase. They see it go into 3.4 percent by the end of this year. It was still a significant amount of hikes on the way. They also cut their outlook for this year’s economic growth. Now they expect just 1.7 percent gain in GDP . That’s down from 2.8 percent from March. You see the economy is slowing. It’s probably important to note that the inflation projection as gauged by the personal consumption expenditure index also rose to 5.2 percent this year from 4.3. What we’re having […]

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