• Sat. Feb 24th, 2024
After a pause, the US Fed is likely to raise interest rates to a 22-year high

After a pause in June, the US Federal Reserve marked its tightest monetary stance in 22 years despite recent signs of slowing inflation and is widely expected to implement another interest rate hike on Wednesday. After 10 consecutive hikes in a year, the Fed decided last month to halt its aggressive monetary tightening campaign to give policymakers more time to assess the health of the US economy and the impact of recent banking pressures on credit conditions.

After a pause in June, the US Federal Reserve marked its tightest monetary stance in 22 years despite recent signs of slowing inflation and is widely expected to implement another interest rate hike on Wednesday. After 10 consecutive hikes in a year, the Fed decided last month to halt its aggressive monetary tightening campaign to give policymakers more time to assess the health of the US economy and the impact of recent banking pressures on credit conditions.

In the weeks since the pause, positive upgrades to economic growth and modest inflation data have strengthened the likelihood that the Fed’s rate-setting committee will vote for a quarter-percentage-point hike on July 25-26. The move would raise the federal funds rate to a range between 5.25% and 5.5%, the highest level since 2001.

In the weeks since the pause, positive upgrades to economic growth and modest inflation data have strengthened the likelihood that the Fed’s rate-setting committee will vote for a quarter-percentage-point hike on July 25-26. The move would raise the federal funds rate to a range between 5.25% and 5.5%, the highest level since 2001.

Several experts, including Joseph Gagnon of the Peterson Institute for International Economics (PIIE) and Michael Gapen, Bank of America’s chief US economist, expect a 25 basis point hike at the upcoming meeting.

Several experts, including Joseph Gagnon of the Peterson Institute for International Economics (PIIE) and Michael Gapen, Bank of America’s chief US economist, expect a 25 basis point hike at the upcoming meeting.

Futures traders are now very confident that the Fed will raise its key rate by 25 basis points at its next meeting, with a probability of more than 99%. While a rate hike in July is widely expected, uncertainties remain about how much the Fed will need to act this year to bring inflation back to its long-term goal of two percent.

Futures traders are now very confident that the Fed will raise its key rate by 25 basis points at its next meeting, with a probability of more than 99%. While a rate hike in July is widely expected, uncertainties remain about how much the Fed will need to act this year to bring inflation back to its long-term goal of two percent.

Since the Fed’s decision to pause in June, inflation, measured by its preferred indicator, has fallen below four percent annually, while unemployment has hovered near record lows. Economic growth also picked up sharply in the first quarter on stronger-than-expected consumer spending.

Since the Fed’s decision to pause in June, inflation, measured by its preferred indicator, has fallen below four percent annually, while unemployment has hovered near record lows. Economic growth also picked up sharply in the first quarter on stronger-than-expected consumer spending.

These positive economic developments have raised the prospect of a “soft landing,” in which the Fed successfully controls inflation by raising interest rates without causing a recession or a spike in unemployment.

These positive economic developments have raised the prospect of a “soft landing,” in which the Fed successfully controls inflation by raising interest rates without causing a recession or a spike in unemployment.

Goldman Sachs cut the probability that the US economy will enter a recession in the next 12 months from 25 percent to 20 percent, indicating an increased likelihood of a soft landing scenario. Jan Hatzius, the bank’s chief economist, expressed confidence that a recession was not necessary to bring inflation down to an acceptable level.

Goldman Sachs cut the probability that the US economy will enter a recession in the next 12 months from 25 percent to 20 percent, indicating an increased likelihood of a soft landing scenario. Jan Hatzius, the bank’s chief economist, expressed confidence that a recession was not necessary to bring inflation down to an acceptable level.

Looking ahead, analysts are now focusing on the Fed’s actions after Wednesday’s expected rate hike. Some economists are predicting another rate hike soon at the Fed’s next meeting in September, while others believe the Fed will hold rates steady for some time.

Looking ahead, analysts are now focusing on the Fed’s actions after Wednesday’s expected rate hike. Some economists are predicting another rate hike soon at the Fed’s next meeting in September, while others believe the Fed will hold rates steady for some time.

Fed Chair Jerome Powell’s press conference following the rate decision will be closely watched for any indication of the central bank’s future moves. Many are curious about what markers the committee will need to move toward an extended hold, and Powell’s remarks may shed some light on the matter.

Fed Chair Jerome Powell’s press conference following the rate decision will be closely watched for clues about the central bank’s future moves. Many are curious about what markers the committee will need to move toward an extended hold, and Powell’s comments may shed some light on the matter.

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