High Inflation in Sight, Fed to Signal More Rate Hikes Ahead
WASHINGTON — Last month, when Federal Reserve Chair Jerome Powell spoke at an economic conference in Jackson Hole, Wyoming, he issued a blunt warning: The Fed’s drive to curb inflation by aggressively raising interest rates, he said, would “bring some pain” for Americans.
When the Fed ends its latest meeting today (Sept. 21) and Powell holds a news conference, Americans will likely get a better idea of how much pain could be in store, according to an Associated Press report.
The central bank is expected to raise its key short-term rate by a substantial three-quarters of a point for the third consecutive time. Another hike that large would boost its benchmark rate — which affects many consumer and business loans — to a range of 3% to 3.25%, the highest level in 14 years.
Many Fed watchers, though, will be paying particular attention to Powell’s words at a news conference afterward. His remarks will be parsed for any hint of whether the Fed expects to moderate its rate hikes in the coming months — or instead to continue tightening credit significantly until it’s convinced that inflation is on its way down.
In a further sign of the Fed’s deepening concern about inflation, it will also likely signal Wednesday that it plans to raise rates much higher by year’s end than it had forecast three months ago — and to keep them higher for longer. Economists expect Fed officials to forecast that their key rate could go as high as 4% before the new year. They’re also likely to signal additional hikes in 2023, perhaps to as high as roughly 4.5%.
Read the full Associated Press report.
Source: https://rvbusiness.com/high-inflation-in-sight-fed-to-signal-more-rate-hikes-ahead/
