US Fed reaches final interest rate level against inflation
Date
11/5/2023 3:03:11 AM
(MENAFN) An expert suggests that the US Federal Reserve has reached its final interest rate level in its battle against inflation, and further rate hikes are not anticipated.
The terminal rate, representing the maximum point at which the bank's federal funds rate is projected to rise before tapering off, is currently within the 5.25 percent to 5.5 percent target range. This assessment comes after the Fed's decision to forgo an interest rate increase for the third time at the end of its two-day meeting on Wednesday.
"We predict that the federal funds rate has reached its terminal level for the current hiking cycle," Martin Wurm, a manager at Moody’s Analytics, informed a Turkish news agency.
"In his post-meeting press conference, Chairman Jerome Powell noted that while inflation remains too high, demand and supply conditions are coming more into balance. Importantly, labor markets showed lower trend payroll hiring and stronger prime age labor force participation in recent months," he stated.
After reaching a peak of 9.1 percent in June the previous year, marking the highest rate in over four decades, annual consumer inflation in the United States receded to 3 percent this June but rose to 3.7 percent by September.
In October, the US economy witnessed an increase of 150,000 jobs, falling significantly short of the anticipated 180,000, as per the data released by the Labor Department on Friday.
"The Fed’s tightening also has dampened housing market activity and business investment, and the recent sell-off in the US Treasury market has caused credit conditions to tighten even further," declared Wurm.
In the previous month, the 30-year fixed mortgage rate surged to 7.9 percent, marking its highest point since 2000. The National Association of Realtors (NAR) reports that mortgage rates have remained above 7 percent since early August 2023.
MENAFN05112023000045015839ID1107373746
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.