9 days ago • 1:54 min
The Federal Reserve (the Fed) raised interest rates by three-quarters of a percentage point for the third consecutive time, and warned that more big hikes could be ahead if inflation doesn’t fall decisively toward its 2% target. In fact, the Fed now forecasts that its key federal funds rate will reach 4.4% by the end of this year, on its way to a 4.6% peak in 2023, from its current level between 3% and 3.25%. That sets the stage for another big hike when the Fed meets next in November, and blunts any hopes that the Fed might think about cutting rates anytime soon.
While the size of this week’s hike was no surprise to investors, Fed Chair Jerome Powell came out as more “hawkish”, or aggressive on rates, than expected, and the Fed’s higher new “dot plot” (the forecast path of rates shown
US consumers are already struggling to deal with eye-watering inflation. Soaring housing costs are the last thing they need.
A question from Finimizer Nicolas in Singapore
Here is a summary of the biggest events we were watching this week