The Fed: Another Fed jumbo rate hike is expected next week and then life gets difficult for Powell

by | Oct 28, 2022 | Stock Market

First the easy part. Economists widely expect the Federal Reserve to approve the fourth straight jumbo interest rate rise at its meeting next week. The three quarters of one percentage point hike would bring the central bank’s benchmark rate up to a level of 3.75%- 4%.

“The November decision is a lock. Well I would be floored if they didn’t go 75 basis points” said Jonathan Pingle, chief U.S. economist at UBS. The Fed decision will come at 2 p.m. on Wednesday after two days of talks. What happens at Fed Chairman Jerome Powell’s press conference a half-hour later will be more fraught. The focus will be on whether Powell gives a signal to the market about plans for a smaller rise in its benchmark interest rate in December. The Fed’s “dot-plot” projection of interest rates, released in September, already penciled in a slowdown to a half-point rate hike in December, followed by a quarter-point hike early in 2023. The market is expecting signals for a change in policy and many think Powell will use his press conference to hint that a slower pace of interest rate rises is coming. A Wall Street Journal story last week that said some Fed officia …

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