Federal Reserve and the markets in standoff on rate hikes
By CHRISTOPHER RUGABER and STAN CHOE
AP Business Writers
WASHINGTON (AP) — Sooner or later, either Wall Street or the Federal Reserve has to blink. Nearly a year into the Fed’s drive to quash inflation by hiking interest rates at a blistering pace, investors still don’t seem to fully believe what the Fed warns is coming next: Higher rates through the end of the year, which could sharply raise unemployment and slow growth. Wall Street has a more sanguine view: Investors are betting that the Fed will stop hiking rates soon, pause for a bit and then start cutting rates toward the end of the year to combat what many on Wall Street expect will be a mild recession.