Confidence is growing in the Federal Reserve’s battle against inflation. The Fed slowed its ongoing rate hike amid signs inflation cooled in November.
Although it remains high.
Speaking to reporters, Fed Chair Jerome Powell conceded that the central bank still has “more work to do.”
The Board of Governors of the Federal Reserve System voted unanimously to slow down to a 50 basis-point hike after four consecutive 75 basis-point hikes. Observers don’t expect the Fed to cut interest rates again until 2024.
The Hill has more:
“The committee decided to raise interest rates by 50 basis points today a step down from the 75 basis point pace seen over the previous four meetings. Of course 50 basis points is still a historically large increase, and we still have some ways to go,” Powell said.
“What we’re writing down today is our best estimate of what we think that that peak rate will be based on what we know,” Powell continued. “Obviously, if data if the inflation data come in worse, that could move up. It could move down if inflation data are are softer.”
Fed officials are attempting to balance promising signs of inflation slowing with concerns about a strong economy spurring it higher.
The annual inflation rate as measured by the consumer price index (CPI) fell to 7.1 percent in November from 7.7 percent in October, according to data released Tuesday by the Labor Department. While annual inflation has fallen well below its peak of 9.1 percent in June, it’s still much higher than the Fed’s target of 2 percent.
A probability model from Bloomberg economists estimates that the U.S. will almost certainly experience a recession sometime next year.
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Powell raises the rate yet again and the market takes a nose dive. WELL DONE JOE BIDEN.