Fed Won’t Likely Raise Rates Next Week; Maybe Next Month

WASHINGTON — When an increasingly fractious committee of Federal Reserve policymakers meets next week, Chair Jerome Powell will need to forge a consensus, according to an Associated Press report.

One group of Fed officials would like to pause their relentless campaign of rate increases after 10 straight hikes to allow time to look around and assess whether higher borrowing rates are slowing inflation.

But a second group worries that inflation is still too high and thinks the Fed should continue hiking at least once or twice more — beginning next week.

So how will Powell achieve an accord between the two?

By turning what might normally be considered a “pause” into a “skip.” Whereas a “pause” might suggest that the Fed won’t necessarily raise its benchmark rate again, a “skip” implies that it probably will — just not now. When Powell speaks at a news conference next week, he will likely make clear that the Fed’s key rate — which has elevated the costs of mortgages, auto loans, credit card and business borrowing — may go even higher.

Read the full Associated Press report.

Source: https://rvbusiness.com/fed-wont-likely-raise-rates-next-week-maybe-next-month/