The Federal Reserve may raise interest rates another 75 basis points – or 0.75% – next month.
Federal Reserve officials are alarmed by rapid price increases and persistent inflation, according to a report by The New York Times.
But Joe Biden said the inflation was just ‘transitory.’
“Federal Reserve officials have coalesced around a plan to raise interest rates by three quarters of a point next month as policymakers grow alarmed by the staying power of rapid price increases — and increasingly worried that inflation is now feeding on itself.” The New York Times reported.
Via The New York Times:
Federal Reserve officials have coalesced around a plan to raise interest rates by three quarters of a point next month as policymakers grow alarmed by the staying power of rapid price increases — and increasingly worried that inflation is now feeding on itself.
Such concerns could also prompt the Fed to raise rates at least slightly higher than previously forecast as officials face two huge choices at their coming meetings: when to slow rapid rate increases and when to stop them altogether.
Central bankers had expected to debate slowing down at their November meeting, but a rash of recent data suggesting that the labor market is still strong and that inflation is unrelenting has them poised to delay serious discussion of a smaller move for at least a month. The conversation about whether to scale back is now more likely to happen in December. Investors have entirely priced in a fourth consecutive three-quarter point move at the Fed’s Nov. 1-2 meeting, and officials have made no effort to change that expectation.
Officials may also feel the need to push rates higher than they had expected as recently as September, as inflation remains stubborn even in the face of substantial moves to try to wrestle it under control. While the central bank had penciled in a peak rate of 4.6 next year, that could nudge up depending on incoming data. Rates are now set around 3.1 percent, and the Fed’s next forecast will be released in December.
The Federal Reserve last month raised interest rates by another 75 basis points – or 0.75% to ‘fight’ Bidenflation.
The fed funds rate is now in the range of 3% to 3.25% – the highest since 2008.
30-year fixed rate mortgages already are 7% (and rising).
Home sales are plummeting across the country.
The higher interest rates are expected to eventually lead to a decrease in home prices of up to 20%, according to one economist.
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