The December Consumer Price Index inflation report will come the day before the Fed announces rates.Currently the Fed has suggested that the encouraging inflation numbers as reported in November could have been a one-off, and there’s potentially a lot more work to do before inflation returns to the Fed’s 2% goal.
December’s figures will help inform the trend of U.S. inflation. If there’s another encouraging inflation report, then the Fed may not move rates as high as 5% in 2023, but if November’s numbers for the October rate of inflation were a temporary reduction, then the Fed may move more aggressively in early 2023.The Fed has also signaled that once interest rates reach their target level, they will hold them there for some time.
In part the Fed has been able to raise rates aggressively because the U.S. job market remains strong. It remains to be seen if the prospect of a U.S. recession in 2023, encourages the Fed to soften its approach on interest rates. For now, that’s an academic discussion, as recent economic data has suggested a recession isn’t imminent.
The Fed has made its near-term position reasonably clear and December’s rate decision should not be a surprise. Upcoming data on unemployment and inflation will likely be just as informative in determining the path for interest rates in 2023 as the Fed’s statements. Hot inflation figures and a robust job market may encourage the Fed to move rates a little higher for longer in 2023.
OK,enough don’t care what experts say raising ratesHURT poorPpL 💯 who already have2much on their table!Crazy high rates2STOP spending4 inflation is antiquated!SUPPLYING demand,flooding supply lowers cost4demand!MORE players, cost lowers4consumer STOP Monopolies products&farming
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