Is the US FED going to hike its Fed rate by 50bp in May 2022?

The US FED had indicated that it would hike its fed rate by 50bp in May 2022 and the Fedwatch tool also projected the same rate hike.

Let's verify the forecast by analyzing the 3 Fed rates.

IORB: 0.4% vs 0.15% in March

Although the IORB (0.4%) is still within the current fed rate range of 0.25-0.5%, it has jumped by more than 2x in May compared to the last fed meeting.

EFFR: 0.33% vs 0.08% in March

Although the EFFR (0.33%) is still within the current fed rate range of 0.25-0.5%, it has jumped by more than 2x in May compared to the last fed meeting.

On RRP: 0.3% vs 0.05% in March (Fed is paying.)

On RP: No transaction at 0.5% vs 0.25% in March. (Fed is receiving.)

EFFR: 0.33%

IORB: 0.4%

When the EFFR (0.33%) is lesser than IORB (0.4%), it means that the US is still under the monetary easing condition.  The high cash of US$1.9T deposited with the US FED also shows that there is excess liquidity and the banks have nowhere to invest in other profitable investments.  Thus, we do not see any stress in the US financial system and the US FED will hike at least 50bp in May 2022 as stated because the Fed rates have increased by more than 2x since the last meeting.

Furthermore, the US Fed may also announce the timing of its asset sale because its deposit has crossed US$1.9T in a single day.