Fed

Economists expect Fed officials to forecast that their key rate could go as high as 4 per cent before the new year. They're also likely to signal additional ...

Many economists sound convinced that a recession and widespread layoffs will be necessary to slow rising prices. Most economists expect the Fed to stop raising rates in early 2023. “I do not anticipate the Fed cutting” rates next year, Mester added, dispelling the expectations of many investors on Wall Street who had hoped for such a reversal. At his news conference Wednesday, Powell isn’t likely to drop any hints that the central bank will ease up on its credit tightening campaign. Inflation now appears increasingly fueled by higher wages and by consumers’ steady desire to spend and less by the supply shortages that had bedeviled the economy during the pandemic recession. The Fed’s rapid rate hikes mirror steps that other major central banks are taking, contributing to concerns about a potential global recession. Another hike that large would boost its benchmark rate — which affects many consumer and business loans — to a range of 3 per cent to 3.25 per cent, the highest level in 14 years. The Bank of England, the Reserve Bank of Australia and the Bank of Canada have all carried out hefty rate increases in recent weeks. “They’re going try to avoid recession,” said William Dudley, formerly the president of the Federal Reserve Bank of New York. Short-term rates at that level would make a recession likelier next year by sharply raising the costs of mortgages, car loans and business loans. Economists expect Fed officials to forecast that their key rate could go as high as 4 per cent before the new year. Many Fed watchers, though, will be paying particular attention to Powell’s words at a news conference afterward.

Intensifying its fight against high inflation, the Federal Reserve raised its key interest rate Wednesday by a substantial three-quarters of a point for a ...

The Fed’s rapid rate hikes mirror steps that other major central banks are taking, contributing to concerns about a potential global recession. Still, some economists are beginning to express concern that the Fed’s rapid rate hikes — the fastest since the early 1980s — will cause more economic damage than necessary to tame inflation. Surveys also show that Americans are expecting inflation to ease significantly over the next five years. Powell acknowledged in a speech last month that the Fed’s moves will “bring some pain” to households and businesses. The University of Pennsylvania’s Penn Wharton Budget Model went even further to say “the impact on inflation is statistically indistinguishable from zero” over the next decade. Short-term rates at a level the Fed is now envisioning would make a recession likelier next year by sharply raising the costs of mortgages, car loans and business loans. On Sunday, though, Biden said on CBS’ “60 Minutes” that he believed a soft landing for the economy was still possible, suggesting that his administration’s recent energy and health care legislation would lower prices for pharmaceuticals and health care. It expects the jobless rate to reach 4.4% by the end of 2023, up from its current level of 3.7%. Yet most economists say they think the Fed’s steep rate hikes will lead, over time, to job cuts, rising unemployment and a full-blown recession late this year or early next year. And they expect to raise the rate next year, too, to about 4.6%. By raising borrowing rates, the Fed makes it costlier to take out a mortgage or an auto or business loan. The officials also forecast that they will further raise their benchmark rate to roughly 4.4% by year’s end, a full point higher than they had envisioned as recently as June.

Déterminée à lutter contre une inflation toujours vive, la banque centrale américaine (Fed) a annoncé mercredi une nouvelle forte hausse de ses taux, ...

Le taux de chômage actuel, de 3,7 %, est l’un des plus bas des 50 dernières années, et il n’y a pas assez de travailleurs pour occuper tous les postes vacants. La Fed privilégie cet indice d’inflation, qui s’est établi à 6,3 % sur un an en juillet, selon le plus récent chiffre disponible, à l’indice CPI, qui fait référence pour l’indexation des retraites notamment. Ainsi, la Fed, qui a également actualisé ses prévisions pour l’économie américaine, prévoit désormais une croissance du PIB quasi nulle en 2022 (+0,2 %), quand elle tablait, en juin, sur +1,7 %. J’aimerais qu’il existe un moyen indolore de le faire, mais ce n’est pas le cas », a expliqué M. Cela fait baisser les ventes dans ce secteur qui avait affiché une bonne santé insolente depuis le début de la pandémie. Il a même alerté sur les risques qui pourraient être posés par « un assouplissement prématuré de la politique » monétaire.

Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low ...

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee is strongly committed to returning inflation to its 2 percent objective. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Job gains have been robust in recent months, and the unemployment rate has remained low. Recent indicators point to modest growth in spending and production.

Copyright 2022 The Associated Press. All rights reserved. In its first meeting since July, the Federal Reserve (Fed) raised rates 75bps as markets broadly ...

That said, the financial markets do see a broad range of outcomes for 2023, but only imply about a 1 in 6 chance of the path the Fed currently envisions. The market views that as less likely, believing that the Fed will more likely cut rates, or hold them steady for 2023 in aggregate. However, the language regarding the U.S. Most policy-makers believe rates will end 2022 in a 4% to 4.5% range. It was a consensus decision, with all policy-makers voting for the move. In its first meeting since July, the Federal Reserve (Fed) raised rates 75bps as markets broadly expected.

Déterminée à lutter contre une inflation toujours vive, la banque centrale américaine (Fed) devrait contre-attaquer avec une forte hausse des taux mercredi, ...

La Fed privilégie cet indice d’inflation, qui s’est établi à 6,3% sur un an en juillet, selon le plus récent chiffre disponible, à l’indice CPI, qui fait référence pour l’indexation des retraites notamment. Ainsi, la Fed, qui a également actualisé ses prévisions pour l’économie américaine, prévoit désormais une croissance du PIB quasi-nulle en 2022 (+0,2%), quand elle tablait, en juin, sur +1,7%. J’aimerais qu’il existe un moyen indolore de le faire, mais ce n’est pas le cas», a expliqué M. Cela fait baisser les ventes dans ce secteur qui avait affiché une bonne santé insolente depuis le début de la pandémie. Il a même alerté sur les risques qui pourraient être posés par «un assouplissement prématuré de la politique» monétaire. Elle avait commencé en mars par un relèvement habituel d’un quart de point, avant une hausse d’un demi-point en mai.