Post by account_disabled on Feb 22, 2024 8:46:44 GMT
The U.S. Federal Reserve will wrap up the year with two high-stakes meetings as it prepares to hold rates on Wednesday and hold off on any further tightening amid mixed signals from the world's largest economy. The Federal Open Market Committee on Wednesday is widely expected to keep its benchmark interest rate at a 22-year high, giving the central bank more time to judge progress in bringing inflation back to its 2 percent target. The move marks the clearest sign yet that officials believe the risks facing the U.S. economy have become more complex, and sets up a tense few months as they gauge the impact of an interest rate hike campaign that has already started to affect the activity. If too little is done at this stage to combat price pressures, high inflation could take hold. Doing too much and jeopardizing your hard-earned work achievements.
A year ago we were in a situation that in one sense was completely clear. It was obvious that they needed to raise the policy rate and they had to do it aggressively,” said David Wilcox, who Pakistan Phone Number headed the Federal Reserve's research and statistics division until 2018. “Today we are in a different situation where it is a much harder to know if they have done enough.” Even officials who worried about containing inflation have become increasingly concerned that monetary policy will become too tight, a development that will complicate future decisions and make the Fed's next rate-setting meeting beginning on the 31st October is a suspense. While market participants generally believe the Federal Reserve will keep interest rates at the current level of percent well into 2024, nearly half of leading academic economists recently surveyed by the Financial Times expect the Federal Reserve to raise another quarter point.
While more than 40 percent predicted two or more increases of that magnitude. Kristin Forbes, former member of the Bank of England's Monetary Policy Committee, predicted that "at some point they will have another increase" © Bloomberg As hawkish Federal Reserve officials keep the door ajar on higher borrowing costs (even as they support a slower pace of tightening amid signs of a weakening labor market), economists are left with a difficult question: What will prompt the central bank to tighten the monetary screws again? One factor is the American consumer, whose spending has defied expectations of a sharper slowdown, a surprising resilience that could keep prices elevated. Federal Reserve Chairman Jay Powell addressed this last month at the central bank's symposium in Jackson Hole, Wyoming.
A year ago we were in a situation that in one sense was completely clear. It was obvious that they needed to raise the policy rate and they had to do it aggressively,” said David Wilcox, who Pakistan Phone Number headed the Federal Reserve's research and statistics division until 2018. “Today we are in a different situation where it is a much harder to know if they have done enough.” Even officials who worried about containing inflation have become increasingly concerned that monetary policy will become too tight, a development that will complicate future decisions and make the Fed's next rate-setting meeting beginning on the 31st October is a suspense. While market participants generally believe the Federal Reserve will keep interest rates at the current level of percent well into 2024, nearly half of leading academic economists recently surveyed by the Financial Times expect the Federal Reserve to raise another quarter point.
While more than 40 percent predicted two or more increases of that magnitude. Kristin Forbes, former member of the Bank of England's Monetary Policy Committee, predicted that "at some point they will have another increase" © Bloomberg As hawkish Federal Reserve officials keep the door ajar on higher borrowing costs (even as they support a slower pace of tightening amid signs of a weakening labor market), economists are left with a difficult question: What will prompt the central bank to tighten the monetary screws again? One factor is the American consumer, whose spending has defied expectations of a sharper slowdown, a surprising resilience that could keep prices elevated. Federal Reserve Chairman Jay Powell addressed this last month at the central bank's symposium in Jackson Hole, Wyoming.