Federal Reserve Rates and Operations

U.S. Federal Reserve Chairman Jerome Powell said at 2:30 a.m. Cambodia time on Wednesday that the U.S. central bank will hike interest rates further next year despite the recession-led economic downturn. Possibly, Federal Reserve Chairman Jerome Powell said on Wednesday that the central bank will have to pay for higher spending if it doesn’t forcefully rein in inflation. .

Powell told reporters after the central bank’s policy-making committee raised its benchmark interest rate by half a percentage point, or 0.50%, and expected it to continue rising above 5% through 2023. This is something not seen since the Great Recession of 2007.

Borrowing costs will rise even as central bank officials forecast a slowdown in economic growth next year, at 0.5% annual growth, and unemployment is nearing the end. Furthermore, peaking at the end of 2023, this is a historic increase related to the economic crisis.

“We’re not talking about this recession, this is a recession,” Powell told a news conference. “I don’t think it’s enough to call it a recession,” and described the economic slowdown set by central bankers next year as “modest.” No, it’s a positive increase, “although” it doesn’t appear to be improving. “But other aspects of the central bank’s forecast, notably the rise in the unemployment rate to 4.6 per cent from the current 3.7 per cent, are consistent. The central bank kept its target policy rate at “tight levels” amid a slowing economy. Wednesday’s rate hike central bank policy Setters voted unanimously to raise financial market expectations to target policy rates to a range of 4.25%-4.50%, officials expect to rise to between 5.00% and the next 5.25%, seven of 19 policies are expected to require higher rates , the Fed unanimously said the risk was more likely to be higher-than-expected inflation than any other surprise.

Despite the recent improvement, the Fed’s preferred measure of inflation is still around three times the central bank’s target, and it will take policymakers at least three years to lower it. Only two of the 19 central banks see the benchmark interest rate below 5% next year, a sign of broad consensus to tackle inflation. New data showing slowing inflation could push the Fed off a bad path and push policymakers to lower interest rates by the end of next year.

The new statement came after a policy meeting that backed a three-quarters (0.75 percent) hike in the previous decision. US stocks fell. Wednesday. Yields in the U.S. Treasury market, which plays a key role in transmitting central bank policy decisions to the real economy, are inching lower. The dollar weakened against other currencies.

“It doesn’t matter how fast we go,” Powell said, noting that the bigger problem for policymakers is finding the endpoint of “appropriate tightening” and deciding whether to keep prices down. How long have you been here?

“Our focus now is to shift our policy stance to one sufficient to ensure that inflation returns to our 2 percent objective over time,” Powell said. It’s not about rate cuts,” Powell said, “but prices need more evidence that inflation is on a downward trajectory. ”

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