Federal Reserve Poised to Announce Latest Interest Rate Hikes Despite Slowing Inflation

Federal Reserve Poised to Announce , Latest Interest Rate Hikes , Despite Slowing Inflation.

On February 1, the Federal Reserve will announce its latest interest rate increase which comes amid the central bank's aggressive campaign to slow inflation.

NBC reports that while there are signs that inflation is slowing, some indications suggest the economy is reflating, which could also send prices up.

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We expect Fed Chair Powell will insist on the need hold policy at a restrictive level for some time to bring inflation down toward the 2% target, Gregory Daco, chief economist at Ernst & Young’s EY-Parthenon consultancy, via NBC.

Powell will also stress that history cautions strongly against prematurely loosening policy, Gregory Daco, chief economist at Ernst & Young’s EY-Parthenon consultancy, via NBC.

Powell will also stress that history cautions strongly against prematurely loosening policy, Gregory Daco, chief economist at Ernst & Young’s EY-Parthenon consultancy, via NBC.

According to the 'Bloomberg' index, financial conditions have eased to reach the lowest level since last February.

These changes can be seen in declining average mortgage rates, which have retreated back to 6.13% after hitting a high of 7.08% in November.

NBC reports that the rising price of commodities like oil and the improvement of the stock market have contributed to a sense of cautious optimism regarding the economy.

NBC reports that the rising price of commodities like oil and the improvement of the stock market have contributed to a sense of cautious optimism regarding the economy.

The positive changes have eased fears of a global recession, yet economists believe that the Fed will continue to clamp down to prevent rapid economic growth.

According to Neil Dutta, the head of U.S. economics at Renaissance Macro financial group, the Fed's 0.25% interest rate hike may end up being too small.

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The Fed’s story only works if the economy is slowing down.

Sorry, but I don’t see it, Neil Dutta, head of U.S. economics at Renaissance Macro financial group, via NBC