1/23/2024 0 Comments Next federal reserve meetingwages were up 4.3% year-over-year in August. unemployment rate also jumped to 3.8%, its highest level since February 2022. economy added 187,000 jobs in August, exceeding economist expectations of 170,000 new jobs. labor market has remained tight, but it has shown signs of softening in recent months. “In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee 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,” the FOMC said in its statement. Core PCE is the Federal Reserve’s preferred inflation measure, and its long-term target for core PCE inflation is just 2%. In late August, the Commerce Department reported the core personal consumption expenditures (PCE) price index was up 4.2% year-over-year in July, up from a 4.1% gain in June but down from a 2022 peak of 5.3%. However, navigating a “soft landing” for the economy may prove difficult because higher interest rates increase borrowing costs for both companies and consumers, slowing economic activity.Įarlier this month, the Labor Department reported that its consumer price index (CPI) rose 3.7% year-over-year in August, up from a 3.2% gain in July but still well below a 40-year high of 9.1% in June 2022. The Federal Reserve has been attempting to bring down inflation by raising interest rates without tipping the U.S. It’s unclear exactly when the Fed will pivot from rate hikes to rate cuts, and there is still a chance the central bank will raise rates once again before the end of the year. Inflation levels have been trending lower in 2023, allowing the Fed to take its foot off the gas pedal a bit and slow the pace of its rate hikes. The FOMC has been raising interest rates since March of last year in an attempt to slow down the economy and ease inflation. In addition to announcing the interest rate decision, the Federal Reserve also said it will continue to allow up to $60 billion in Treasury securities and $35 billion in agency mortgage-backed securities (MBS) to mature and roll off its more than $8.1 trillion balance sheet per month in its continuing battle against inflation.Ī combination of pent-up consumer demand, supply chain disruptions and a tight labor market sent inflation soaring to 40-year highs in 2022. The Fed’s September pause doesn’t necessarily mean interest rates have peaked, but a growing number of investors are optimistic the central bank will have no need to raise rates further in this cycle.Įven so, projections released by the FOMC signal one more rate hike this year. Wednesday’s hold by the central bank’s Federal Open Market Committee (FOMC) comes after the policy panel raised the Fed’s key federal funds rate by a quarter of one percentage point at the last meeting in July in an ongoing effort to combat inflation. The Federal Reserve has opted to maintain its benchmark interest rate at its current target range of between 5.25% and 5.5% while indicating that it’s not done raising rates in 2023.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |