{"id":1804464,"date":"2023-01-13T07:36:01","date_gmt":"2023-01-13T12:36:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1804464"},"modified":"2023-01-13T07:37:10","modified_gmt":"2023-01-13T12:37:10","slug":"fed-on-track-for-rate-hike-downshift","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-on-track-for-rate-hike-downshift\/","title":{"rendered":"Fed on Track for Rate-Hike Downshift"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">12<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffed-on-track-for-rate-hike-downshift%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1804464&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47-->\n<div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2023\/01\/1575d5bf829477085fe94aa70fd103e3\" class=\"ff-og-image-inserted\" alt=\"image\"   style=\"display:none\"><\/div>\n<p>(Bloomberg) &#8212; Federal Reserve policymakers are on track to downshift to smaller interest-rate increases at their next meeting following a further cooling in US inflation, though they\u2019re unlikely to pause until prices show more definitive evidence of stabilizing.<\/p>\n<p>Bloomberg: Most Read<\/p>\n<p>Philadelphia Fed President Patrick Harker, speaking Thursday morning shortly after the Labor Department\u2019s release of consumer price data, said rate hikes of a quarter-percentage point \u201cwill be appropriate going forward,\u201d In the second half of 2022, we will see even greater increases. Harker\u2019s comments echoed remarks a day earlier from Susan Collins, his counterpart at the Boston Fed.<\/p>\n<p>Consumer prices increased 6.5% between December and January, which was the slowest inflation rate for more than a decade. Core inflation, which excludes energy and food, rose 5.7% in the same time frame, the smallest increase in one year. Both figures were within the median forecasts.<\/p>\n<p>\u201cThe trend in services inflation seems to be abating. That\u2019s what the Fed will be looking at in today\u2019s report,\u201d Thomas Costerg is a senior US economist at Pictet Wealth Management, Geneva, Switzerland. \u201cAt the margin, this means an increased probability of a 25-basis-point rate hike on February 1st.\u201d<\/p>\n<p>Investors saw these numbers as a sign the Fed was slowing down its tightening campaign. It had been in high gear since last year, when inflation reached its highest point in over 40 years.<\/p>\n<p>With the central bank\u2019s benchmark rate now at 4.3%, market participants expect a quarter-point rate hike at the Jan. 31-Feb. 1 meeting. Traders have begun to speculate about the possibility that the Fed might forgo a March rate hike. Swaps were able to shift to show less that 50 basis points of tightening in the two meetings ahead.<\/p>\n<p>While moderating inflation paves the way for a slower pace of rate increases in 2023, the market\u2019s expectation of rate cuts later in the year is still at odds with Fed guidance. While policymakers insist on the necessity of keeping rates at an elevated level for some time, they caution against underestimating their willingness to do so.<\/p>\n<p>The future outlook for interest rates will depend on changes in service prices, which Fed Chair Jerome Powell has been closely monitoring in recent months. Officials are concerned that higher wage growth will lead to an increase in inflation in the services sector until the labor market stabilizes.<\/p>\n<p>There are no signs of weakness so far. Thursday&#8217;s Labor Department report showed that applications for unemployment benefit continued to be at historically low levels. The most recent monthly jobs report shows that there was a cooling in wage growth in December. However, hiring was still strong and unemployment rates fell to the lowest level in five decades.<\/p>\n<p>Stripping out energy, rent and owners\u2019 equivalent rent, services prices were up 0.3% last month, according to Bloomberg calculations. Removing medical care as well \u2014 an adjustment that helps offset a quirk in the CPI\u2019s calculation of health insurance \u2014 services prices were up by a similar amount.<\/p>\n<p>Bloomberg Economics Says&#8230;<\/p>\n<p>\u201cA mostly favorable December CPI report gives the Fed room to further downshift the pace of rate hikes to 25 basis points at the Jan. 31-Feb. 1 meeting. We expect the Fed funds rate to peak at 5% in March and stay at that level for the rest of the year.\u201d<\/p>\n<p>\u2014Anna Wong, economist<\/p>\n<p>You can read the entire note by clicking here<\/p>\n<p>Shelter costs \u2014 which are the biggest services component and make up about a third of the overall CPI index \u2014 increased 0.8% last month, an acceleration from November. Rents and owners\u2019 equivalent rent both rose by the same amount, while hotel stays advanced 1.5% after falling in the prior month.<\/p>\n<p>Because of the way this category is calculated, there\u2019s a delay between real-time measures \u2014 which currently show rents are beginning to decline \u2014 and the Labor Department data.<\/p>\n<p>Prices for goods fell 0.3% without regard to food and energy. The biggest culprit was used cars. Gasoline prices dropped 9.4%, \u201cby far\u201d The Labor Department was the biggest contributor to the decline in headline figures, he stated.<\/p>\n<p>The rotation in consumer spending from goods and services continues to impact merchandise prices. A further fall in goods prices is expected as a major driver for a rapid decline in annual core CPI by 2023. This builds on the pullback that occurred in the last months of 2018.<\/p>\n<p>While it\u2019s broadly expected for annual price growth to substantially slow this year, a lot of uncertainty remains as to how far inflation may fall and whether the Fed\u2019s rapid rate increases ultimately tip the US into recession.<\/p>\n<p>Fed watchers cautioned against a reduction to quarter-point rises despite good news on inflation.<\/p>\n<p>\u201cThe base case for the February meeting is 25 basis points, but with still notable risk of 50 basis points,\u201d Roberto Perli, Piper Sandler &#038; Co.&#8217;s head of global policy research in Washington, said the statement. \u201cWhat matters the most is the peak rate, and there is no reason to believe that the Fed changed its mind about it being north of 5% based on today\u2019s report.\u201d<\/p>\n<p>&#8211;With the assistance of Chris Middleton. Sydney Maki. Jordan Yadoo.<\/p>\n<p>Bloomberg Businessweek: Most Read<\/p>\n<p>\u00a92023 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Bloomberg) &#8212; Federal Reserve policymakers are on track to downshift to smaller interest-rate increases at their next meeting following a further cooling in US inflation, though they\u2019re unlikely to pause until prices show more definitive evidence of stabilizing. Bloomberg: Most Read Philadelphia Fed President Patrick Harker, speaking Thursday morning shortly after the Labor Department\u2019s release &hellip;<\/p>\n","protected":false},"author":1,"featured_media":1804468,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[5458,14706,7498,14707,3819,4319],"class_list":["post-1804464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-bongino","tag-downshift","tag-fed","tag-rate-hike","tag-report","tag-track"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1804464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1804464"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1804464\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1804468"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1804464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1804464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1804464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}