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The minutes of the Federal Reserve’s September meeting revealed that it expects to continue raising interest rates. (iStock)
The Federal Reserve recently released the minutes of its latest September meeting. This indicates that members of the Federal Reserve plan to continue raising interest rates in the coming months.
The Federal Reserve recognized that it may need to slow the pace of interest rate increases, but may raise the federal funds rate further before pausing, according to the minutes.
“Several participants noted the importance of adjusting the pace of further policy tightening, particularly in the current highly uncertain global economic and financial environment, aimed at mitigating the risk of material adverse effects on the economic outlook. “At some point, the pace of policy rate hikes was expected to rise, while assessing the cumulative impact of policy adjustments on economic activity and inflation as the stance of monetary policy tightened further,” he said. I observed that it would be appropriate to slow down .
“Many participants believe that once the policy rate reaches a sufficiently restrictive level, it will remain there for some time until there is compelling evidence that inflation is on track to return to its 2% target. I suggested that it was likely appropriate,” he continued. .
At its September meeting, the Federal Open Market Committee (FOMC) raised the federal funds rate by 75 basis points. This is his third consecutive 75-basis-point rise and his fifth rate hike this year.
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Fed announces third consecutive 75 basis point rate hikes
Fed battles highest inflation in 40 years
When inflation rises, the Federal Reserve can bring it down by raising interest rates and slowing the economy. Inflation has slowed in recent months as the Federal Reserve hiked interest rates, but remains very high.
The consumer price index (CPI), a measure of inflation, rose 8.2% annually in September, just below the 8.3% rise in August, but the highest in 40 years, according to the Labor Department. It’s getting closer and closer to June’s 9.1%. Statistics (BLS).
“The Fed is trying to keep inflation under control, but today’s CPI data won’t tell you that,” said John Lear, chief economist at Morning Consult. said in a tweet After the last inflation report. “Energy prices are falling while inflation in shelter and transport services is overheating, forcing consumers to make tough spending decisions towards the end of the year.”
If you’re struggling amidst high inflation, you can consider taking out a personal loan to pay off your debt at a lower interest rate and reduce your monthly expenses. Visit Credible to compare multiple lenders at once and choose the one with the best interest rates.
Inflation improved slightly in September but remains close to record highs
How Federal Reserve Rate Hikes Affect Your Wallet
When the Federal Reserve raises the Federal Funds Rate, it increases the rate at which banks borrow money overnight. These banks pass on higher costs to consumers by raising interest rates on credit products.
The central bank is expected to approve a fourth straight rate hike of 75 basis points in November, which could increase interest rates on credit products such as personal loans, credit cards and mortgages. The CME FedWatch tool, which tracks trades, shows a greater than 97% chance that the Fed will raise rates by 75 basis points in his November.
If you want to take advantage before interest rates rise today, consider refinancing private student loans to lower interest rates and monthly payments. To find out if this is the right option for you, contact Credible to speak with a student loan expert to answer all your questions.
Some U.S. workers are delaying retirement because of inflation, cost of living is rising: survey
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