Jerome Powell to Slow Rate-Rise in December

     In recent news, Alicia Wallace wrote an article on CNN titled Smaller rate hikes are likely coming in December, says Fed Chair Powell. This article, written in correlation to words said by Jerome Powell at today's Economic Forum, discusses the much talked about pull-back on the pace the Fed has been rising interest rates over the past year. 

    Given the central bank's target of 2% inflation, we are a long ways from this as we have seen it peak at 9.1% during the summer and slow to 7.7% in the most recent CPI. During the forum, Powell stated "The time for moderating the pace of rate increases may come as soon as the December meeting," which indicates we might see a slowdown from the past four 0.75 point interest rate raises aimed to slow inflation. 

 

    Powell pointed out some promising developments within our economy such as the economies maintained unemployment rate and the recent news of another increase in jobs. Although we are still far away from the 2% inflation target, there are still positives to look at within our economy. 

 

    With the unprecedented actions we have seen since March within the central banks, Wallace points out that this sudden increase in rates can take months and even years to see change within the economy. As this is unheard of in the modern central banking era, we have still yet to see any eye-opening changes in inflation, which is why I believe Powell is looking at the option of a "lower and slower" rise in interest rates over a longer period. With the insights given by Wallace and statements said by Jerome Powell, I expect the Fed to increase interest rates by 0.50 points in December as opposed to the recent 0.75 rises in recent meetings. 

https://www.cnn.com/2022/11/30/economy/jerome-powell-speech-economy