The chair of the Fed stated that for the moment the rate hikes have been paused; however, the majority of the rate deciders believe that there is a possibility of another rate hike by the end of 2023.
The Federal Reserve has confirmed that for the moment the rate hikes have been paused, but it has not ruled out the possibility of increasing them since the full effect of the rise has yet to be felt.
Following the Fed’s decision regarding rate hikes, the Bank of England may soon make the same decision.
At the most recent interest rate meeting in July, the cost of borrowing in the US reached a 22-year high following a brief pause in the Fed’s program of rate increases.
To bring down inflation, the US Central Bank increased rates to make borrowing more expensive by taking money out of the economy and reducing spending.
The country’s inflation rate, which was 3.7% in the year to September and was up slightly from the two-year low of 3% in June, was over the Federal Reserve’s 2% target.
Even though the rate is considerably lower than the 6.7% in the UK, Fed chair Jerome Powell said in a statement that there was a “long way to go” in the process of bringing inflation down to the 2% target.
“It’s more likely than not that it will be appropriate for us to raise rates one more time in the two remaining meetings this year,” Mr. Powell conveyed, referring to the beliefs of the majority of rate deciders.
- Published By Team Timeswire