https://finance.yahoo.com/news/fed-expected-to-hold-rates-at-22-year-high-but-leave-hikes-on-the-table-094002863.html
Tuesday, October 31, 2023
Fed Currently Holding High Interest rates
The fed has been raising interest rates in order to fight inflation in recent times to ultimately avoid the occurrence of a recession. They currently have a tight financial condition while there are several economic indicators showing strength. Leading the fed to decide to keep the interest rates at 5.25-5%, a high of 22 years, with the potential to raise them. The goal of this is to lower the inflation to its target of 2%. Hedge fund managers are predicting that the interest rates will stay for the rest of the year and possibly hike even more early into 2024 or even for the coming years. This is largely dependent on whether the recent increase of economic activity will continue to rise or not. Consumer spending has continued to grow causing the third quarter GDP to grow at 4.9%. This is in despite of a rise of 0.3% in prices, which is the highest in months. But some believe that this growth does not accurately represent the true state of the economy.
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Do you think the target number of 2% will be reached in time? If growth in consumer spending doesn't state the true state of he economy then what does? I think consumer spending will continue to increase as the economy will grow.
ReplyDeleteDrew,
ReplyDeleteI found your post interesting because my post was also focused on the potential for the Fed to choose to continue to keep interest rates high. What I was most interested in learning about was whether or not the market has enough strength to return to its original state. Do you believe the inflation rate will ever return back to 2% and will lowering prices allow for an even speedier journey, encouraging more consumer spending?