• About Us
  • Disclaimer
  • Contact Us
  • Privacy Policy
Tuesday, March 28, 2023
  • Login
  • Business
    • Reviews
    • Startup
  • Lifestyle
    • Celebrity News
    • Travel
    • Food
  • Entertainment
    • Celebrity News
    • Biography
  • Lifestyle
    • Fashion
    • Food
    • Travel
  • Law
  • Automotive
  • Cannabis
  • Tech
    • Gaming
    • Cryptocurrency
No Result
View All Result
Us timenow
Advertisement
  • Business
    • Reviews
    • Startup
  • Lifestyle
    • Celebrity News
    • Travel
    • Food
  • Entertainment
    • Celebrity News
    • Biography
  • Lifestyle
    • Fashion
    • Food
    • Travel
  • Law
  • Automotive
  • Cannabis
  • Tech
    • Gaming
    • Cryptocurrency
No Result
View All Result
Us timenow
No Result
View All Result
Home Business

Fed says it may hike interest rates at slower pace, but destination is now 5% or higher

adriana wills by adriana wills
November 3, 2022
in Business
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter


The Federal Reserve on Wednesday approved the fourth straight jumbo increase in a key U.S. interest rate and signaled rates are likely to go higher than previously forecast.

News of a higher terminal rate overshadowed more dovish comments from the central bank statement that it might move more slowly to better evaluate the effects on the economy.

At 2 p.m. Eastern, markets
DJIA,
-1.55%

SPX,
-2.50%

cheered as the Fed, for the first time, signaled in its formal statement it would watch closely whether rapidly rising borrowing costs might damage the economy owing to the usual “lag” in how higher rates slow growth.

But equities turned lower after Chairman Jerome Powell’s tougher talk in a press conference.

By a unanimous vote, the Fed hiked its rate by 0.75 percentage points, to a range of 3.75% to 4%. That’s the highest level in 15 years.

In new language, the Fed said it expects to continue with further rate hikes “until they are sufficiently restrictive” to return inflation to the long-targeted 2% “over time.”

Opinion: How Powell pivoted away from the Fed’s dovish message and tanked the markets

The Fed also said it will “take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

Many investors and economists viewed the language as a step back from the Fed’s aggressive strategy this year.

Powell opened the door to downshifting to a slower pace of rate hikes even if the data doesn’t show lower inflation, said Matthew Luzzetti, chief U.S. economist at Deutsche Bank.

Powell is emphasizing that the Fed has done a lot of tightening already, he added.

Powell acknowledged in his post-meeting press conference that at some point “it will be appropriate to slow the pace of increases.”

Things took a turn toward the hawkish when Powell said the central bank’s benchmark rate was likely to end up “higher than previously expected.” The Fed’s last forecast estimated its benchmark rate would top out in a range of 4.5%-4.75%.

Two months ago, the Fed penciled in a half-percentage-point rate hike in December, but that could change.

Economists say the eventual size of the move at the next Fed monetary-policy meeting, on Dec. 13 and 14, will depend on the economic data. There will be two unemployment reports and two consumer-price-index prints before that meeting.

Before Powell’s remarks, the conventional wisdom was that the Fed would reduce the size of hikes to 50 basis points next month, and then enact a final, quarter-point hike early in 2023.

More economists are now penciling in a “terminal” rate of 5%, if not higher.  

The latest reading of annual core consumer inflation reached a high of 6.6% in September, the strongest increase since 1982.

Powell said the window to achieve a “soft landing” is narrowing. A sizable number of economists are calling for a recession next year.

If there is a recession, economists warn, the Fed won’t likely ride to the rescue. The central bank has indicated a desire to hold the benchmark rate at a high level to strangle inflation. 

For now, the economy is still showing plenty of signs of life. The economy grew at a 2.6% annual rate in the third quarter. Economists expect the October employment report Friday to show job growth above 200,000.

MarketWatch Live: MarketWatch’s live and in-depth coverage of the financial markets



Source link

Tags: article_normalbankingBanking/Creditbanksbond marketsC&E Exclusion FiltercommodityCommodity/Financial Market NewsContent TypescreditdebtDebt/Bond MarketsEconomic NewsEquity MarketsFactiva Filtersfedfinancial market newsFinancial Servicesforex marketsgrowthhikeinflationInterest RatesinvestingInvesting/SecuritiesIWE FilterjobslabormarketMonetary PolicyMoneyMoney/Forex MarketspowellraterecessionsecuritiesTableswages
adriana wills

adriana wills

Stay Connected test

  • 23.8k Followers
  • 99 Subscribers
  • Trending
  • Comments
  • Latest

Concerning Gabriel Kuhn and Daniel Patry

August 19, 2022

Emily Ratajkowski Seemingly Comes Out As Bisexual On TikTok: Video – Hollywood Life

October 10, 2022

Kylie Jenner & Kris’ James Corden Interview: Video – Hollywood Life

September 9, 2022

Kate Beckinsale’s Strapless Bikini & Mermaid Tail: Video – Hollywood Life

September 19, 2022

Sofia Carson Defends ‘Purple Hearts’ Amid Viewer Backlash

0

Why were Doritos jacked buffalo ranch discontinued?

0

5 Americans Injured In Jerusalem Bus Shooting

0

AnnaSophia Robb Praises Austin Butler’s ‘Dedicated’ Work in ‘Elvis’

0

Alienware Aurora 2019 – Features Price and Other Details!

March 24, 2023
Bird Nest Ferns

An Easy-to-Follow Guide to Keeping Bird Nest Ferns Healthy

March 24, 2023
twitter scihub indiavan sartorrentfreak

Twitter Scihub Indiavan SartorrentFreak

February 7, 2023

Jokowi Seeks Investors for Indonesia’s Airports to Curb Deficit

January 21, 2023

Recent News

Alienware Aurora 2019 – Features Price and Other Details!

March 24, 2023
Bird Nest Ferns

An Easy-to-Follow Guide to Keeping Bird Nest Ferns Healthy

March 24, 2023
twitter scihub indiavan sartorrentfreak

Twitter Scihub Indiavan SartorrentFreak

February 7, 2023

Jokowi Seeks Investors for Indonesia’s Airports to Curb Deficit

January 21, 2023
Us timenow

If you use the internet, you are aware of this blog. Therefore, USTimenow offers information on global news in the areas of health, fashion, business, media entertainment, TV dramas, and celebrity rumours. This website's goal is to provide Internet-related knowledge for novices.

Follow Us

Browse by Category

  • Biography
  • Business
  • Cannabis
  • Celebrity News
  • Education
  • Entertainment
  • Fashion
  • Food
  • Gadget & Electronics
  • Gaming
  • Guns & Ammunition
  • Health
  • Lifestyle
  • Mobile & Laptops
  • News
  • Reviews
  • Software & Apps
  • Sports
  • Startup
  • Tech
  • Travel
  • Web development

Recent News

Alienware Aurora 2019 – Features Price and Other Details!

March 24, 2023
Bird Nest Ferns

An Easy-to-Follow Guide to Keeping Bird Nest Ferns Healthy

March 24, 2023
No Result
View All Result

© 2023 Ustimenow - Premium WordPress news & magazine theme by Ustimenow.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In