Main Topic: The Federal Reserve's strategy of raising interest rates to combat inflation and bring down the price of goods and services in the economy.
Key Points:
1. Increasing the cost of monthly credit payments helps to reduce overall economic activity and prevent inflation.
2. Higher interest rates make it more expensive for consumers and businesses to borrow money, leading to reduced spending and investment.
3. The goal is to bring down inflation to a target level of 2% and maintain price stability, which is crucial for a strong labor market and a resilient economy.
Main Topic: The U.S. Federal Reserve's need to raise interest rates further to bring down inflation.
Key Points:
1. Governor Michelle Bowman supports the Fed's quarter-point increase in interest rates last month due to high inflation, strong consumer spending, a rebound in the housing market, and a tight labor market.
2. Bowman expects additional rate increases to reach the Fed's 2 percent inflation target.
3. Monetary policy is not predetermined, and future decisions will be data-driven. Bowman will consider consistent evidence of inflation decline, signs of slowing consumer spending, and loosening labor market conditions.
The majority of economists polled by Reuters predict that the U.S. Federal Reserve will not raise interest rates again, and they expect the central bank to wait until at least the end of March before cutting them, as the probability of a recession within a year falls to its lowest level since September 2022.
Experts are divided on whether the US Federal Reserve should raise its interest rate target to 3% to combat inflation and cushion against recessions, with some arguing that raising inflation targets would be futile.
Federal Reserve Bank of Philadelphia President Patrick Harker does not believe that the U.S. central bank will need to increase interest rates again and suggests holding steady to see how the economy responds, stating that the current restrictive stance should bring inflation down.
Federal Reserve Chair Jerome Powell is expected to signal in his upcoming speech that the Fed plans to maintain its benchmark interest rate at a peak level for a longer period than anticipated, suggesting that any rate cuts are unlikely until well into next year, as the central bank aims to further slow borrowing and spending to reduce inflation.
Federal Reserve Chair Jerome H. Powell stated in a speech at the Jackson Hole symposium that the central bank is prepared to raise interest rates further if needed, signaling that they do not believe inflation is fully under control. The Fed will proceed cautiously and assess economic data as they determine whether to make further policy adjustments.
The president of the Federal Reserve Bank of Philadelphia believes that the US central bank has already raised interest rates enough to bring inflation down to pre-pandemic levels of around 2%.
The Bank of England may have to increase interest rates if the US Federal Reserve decides to raise rates to cut inflation, in order to prevent the pound from weakening and inflation from rising further.
The former president of the Boston Fed suggests that the Federal Reserve can stop raising interest rates if the labor market and economic growth continue to slow at the current pace.
Dallas Federal Reserve Bank President Lorie Logan believes that while it may be appropriate to skip an interest-rate increase at the upcoming meeting, further policy tightening will likely be necessary to bring inflation down to 2% in a timely manner.
Federal Reserve policymakers are not eager to raise interest rates, but they are cautious about declaring victory as they monitor data such as inflation and job growth; most do not expect a rate hike at the upcoming policy-setting meeting.
The Federal Reserve should consider cutting its policy rate within the next six months to stabilize real rates and avoid tipping the economy into a recession, as financial stress in the real economy is rising despite slower hiring and inflation cooling, according to economist Joseph Brusuelas.
The Federal Reserve is expected to keep its benchmark overnight interest rate unchanged and delay any rate cuts until at least 2024, according to a Reuters poll of economists, despite some suggesting that another rate hike might be needed to address inflation.
Rising energy costs are predicted to contribute to an increase in inflation rate, but it is unlikely to prompt the Federal Reserve to raise interest rates, though there may be another rate hike in the future.
Economist Campbell Harvey warns that the Federal Reserve should not raise rates later this year, as he believes a recession may occur in 2024 due to an inverted yield curve and potential distortions in Bureau of Labor Statistics and GDP figures.
Goldman Sachs strategists predict that the Federal Reserve is unlikely to raise interest rates at its upcoming meeting, but expect the central bank to increase its economic growth projections and make slight adjustments to its interest rate projections.
The Federal Reserve's decision to raise interest rates will continue to burden borrowers with higher bills on credit cards, student loans, car loans, and mortgages, while savers are rewarded with higher rates on savings accounts and certificates of deposit.
The Federal Reserve will continue raising interest rates until inflation decreases, even if it means more people losing their jobs, according to CNBC's Jim Cramer.
Federal Reserve policymakers Governor Michelle Bowman and Boston Fed President Susan Collins expressed the need to keep interest rates elevated to combat inflation, with Bowman suggesting further rate hikes will likely be needed to bring inflation down to the Fed's 2% target and Collins stating that further tightening is not off the table as progress in battling inflation has been slow.
At least one more interest-rate hike is possible, according to Federal Reserve officials, who suggest that borrowing costs may need to remain higher for longer in order to address inflation concerns and reach the central bank's 2% target.
The former Goldman Sachs chairman and CEO, Lloyd Blankfein, believes that the Federal Reserve may not need to keep interest rates high for an extended period, as cuts to rates could be on the horizon sooner than expected due to relatively subdued inflation, despite the tough rhetoric from top Fed officials.
The Federal Reserve will continue to raise interest rates as inflation resurfaces, according to Wall Street investor Caitlin Long, with big corporations benefiting while other sectors of the US economy are already in recession.
Federal Reserve Governor Michelle Bowman suggests that further interest rate hikes may be necessary to bring inflation back to the central bank's target of 2%, despite recent data showing slower price increases.
Billionaire investor Bill Ackman predicts that the Federal Reserve is likely done raising interest rates as the economy slows down, but warns of continuing spillover effects and expects bond yields to rise further.
Two Federal Reserve officials, Raphael Bostic and Loretta Mester, expressed their beliefs that interest rates will remain high for an extended period of time due to the need for restrictive monetary policy and the strength of the US economy.
The chaos in Washington and uncertainty surrounding a possible government shutdown could make it less likely for the Federal Reserve to raise interest rates again this year, as the economy and inflation appear to be cooling off.
The Federal Reserve may not raise interest rates again this year due to an already uncertain political climate in Washington, as well as a cooling economy, slowing inflation, and potential negative impacts from high interest rates and a government shutdown.
The Federal Reserve is facing a tough decision on interest rates as some officials believe further rate increases are necessary to combat inflation, while others argue that the current rate tightening will continue to ease rising prices; however, the recent sell-off in government bonds could have a cooling effect on the economy, which may influence the Fed's decision.
The Federal Reserve officials suggested that they may not raise interest rates at the next meeting due to the surge in long-term interest rates, which has made borrowing more expensive and could help cool inflation without further action.
Federal Reserve officials are cautious about raising interest rates further due to the risks of stifling economic growth and increasing unemployment, despite expectations of a potential rate hike, according to newly released minutes from their September meeting.
BMO Senior Economist Jennifer Lee discusses the factors that could lead the Federal Reserve to raise interest rates, including upward pressure on prices, a resilient U.S. consumer, energy prices, and inflation expectations.
Federal Reserve Chair Jerome Powell indicated that the strength of the U.S. economy and tight labor markets could warrant further interest rate increases, countering market expectations that rate hikes had come to an end. Powell also acknowledged that inflation is still too high and further rate increases could be necessary.
Federal Reserve Chair Jerome H. Powell stated that the central bank may need to raise interest rates further if economic data continues to show strong growth or if the labor market stops cooling.
The Federal Reserve may need to increase interest rates further to combat persistent inflation in the US economy, despite the recent surge in Treasury yields prompting investors to question further rate hikes, according to Richard Clarida of Pimco. Clarida also highlighted the challenge of deciding when to start cutting interest rates and predicted that the US dollar will return to a more normal level once rate differentials close.
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