The Fed Increased Rates By 25 bps, Leaving The Door Wide Open For More Rate Hikes In 2023
Jerome Powell Says Fed Staff Is No Longer Forecasting a Recession
The Federal Reserve is expected to slow its pace of monetary tightening after increasing rates by 25 basis points during its July 25-26 meeting. The overnight benchmark rate increased to a range of 5.25% to 5.50%, the highest level since March 2001.
The Fed Chair Jerome Powell left the door open for future rate hikes, stating they could either hold the rate at the September meeting, but they will hike if they feel they need to. He added, “It's really a question of how do you balance the 2 risks, the risk of doing too much or doing too little”:
Many experts believe that the increase in July may be the last rate hike in 2023 as the Fed policy makers won’t have a reason to pursue such an aggressive policy moving forward.
As of today, the forecast indicates another hike in September is highly unlikely:
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