Fed likely to hike interest rates by 75 basis points in November meeting


Federal Reserve officials are working to introduce another 75 basis points of rate hikes at their November 1-2 meeting, they said. report To wall street journal.

In its last three meetings, mostly held in September, the Fed has raised the federal funds rate benchmark by 75 basis points each time. Currently, the Federal Reserve’s benchmark interest rate is between 3% and 3.25%, but officials expect it to rise above 4% by the end of the year.

By the next meeting, there are indications that interest rates could rise to around 4.40% by the end of 2022. After that, it could rise further to around 4.60% next year.

The June rate hike marks the first time since 1994 that the Fed has raised rates by 75 basis points. The Fed aims to use rate hikes to combat current inflation and bring inflation back to his 2%.

โ€œReturning inflation back to 2% could take the unemployment rate well above 5.3 million and the unemployment rate at the high end of the range, 6.7%.โ€ Said Joe Brusuelas, Chief Economist, RSM US, LLP

Disagreement Among Fed Officials About Future Increments

Fed officials are divided on the future rise in interest rates. Cleveland Federal Reserve Governor Loretta Mester has said she will support a rate hike of 75 basis points her points at both upcoming meetings of the Federal Reserve to combat inflation.

But officials are willing to minimize the impact of initiating an unusually sudden slowdown. Opponents of rate cuts, in their opinion, feel that high inflation has cut deep into the economy.

Federal Reserve Board Christopher Waller It maintains a balanced position among the divided bureaucracy. “At our next meeting, we will have a very thoughtful discussion about the pace of tightening,” the governor said in a speech earlier this month.

At this point, some are suggesting a possible drop in flight rates in early 2023.

Posted In: USA, Bear Market

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