{"id":1834694,"date":"2023-02-04T07:19:48","date_gmt":"2023-02-04T12:19:48","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1834694"},"modified":"2023-02-04T07:23:22","modified_gmt":"2023-02-04T12:23:22","slug":"fed-likely-to-hike-rates-above-5","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-likely-to-hike-rates-above-5\/","title":{"rendered":"Fed Likely to Hike Rates Above 5%"},"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\">14<\/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-likely-to-hike-rates-above-5%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=1834694&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\/02\/bf70feee4eb4129936cbd7416d32c2be\" class=\"ff-og-image-inserted\" alt=\"image\"   style=\"display:none\"><\/div>\n<p>By Ann Saphir<\/p>\n<p>(Reuters) &#8211; To prevent too-high inflation in an economy that has seen a strong labor market despite nearly a year&#8217;s worth of Fed rate increases in 40 years, the U.S. Federal Reserve will likely need to raise the benchmark rate to 5% and maintain it there.<\/p>\n<p>This was Friday&#8217;s betting on financial markets after the U.S. Labor Department reported that employers added more then half a million jobs last week, much more than anticipated, and that the unemployment rate dropped to 3.4%. It is the lowest level in over 50 years.<\/p>\n<p>Mary Daly, president of San Francisco Fed also saw it that way.<\/p>\n<p>Fed policymakers projected that rates would be raised to at least 5.1% by December to curb inflation. However, this projection is still valid. &#8220;good indicator&#8221; Daly shared his thoughts with Fox Business Network regarding where policy is heading.<\/p>\n<p>She added: &#8220;I&#8217;m prepared to do more than that, if more is needed.&#8221;<\/p>\n<p>The view of Daly and the Fed&#8217;s policymakers, including Fed Chair Jerome Powell is not new. It is also not surprising considering what Daly called &#8220;the&#8221; &#8220;wow&#8221; Strength of January&#8217;s job growth.<\/p>\n<p>For markets, however, it&#8217;s a turning point.<\/p>\n<p>The Fed earlier this week increased its benchmark rate by a quarter-of-a-percentage-point to 4.5%-4.75%. Powell stated that the labor market is still tight and that he anticipates the Fed to require additional funds. &#8220;ongoing&#8221; Increases to obtain monetary policy &#8220;sufficiently restrictive&#8221; We need to create a more balanced employment market and reduce too-high inflation.<\/p>\n<p>Although initially skeptical that the Fed would require more than a quarter-point interest-rate rise in March due to a disinflationary trend, futures traders of interest-rate futures were able to price an additional increase in May after Friday&#8217;s employment report.<\/p>\n<p>This would raise the policy rate to 5%-5.255%.<\/p>\n<p>Traders also voiced their expectation for Fed rate reductions after the jobs report. These were priced to start in November instead of September.<\/p>\n<p>Powell stated that he doesn&#8217;t expect inflation to fall quickly enough for the Fed to reduce rates this year.<\/p>\n<p>Friday&#8217;s Labor Department report revealed a slower pace of growth in average hourly earnings at 4.4%, compared to December&#8217;s upwardly revised 4.8%.<\/p>\n<p>&#8220;While the Fed welcomes any signs of easing wage pressures, the pace of growth in average hourly earnings is still too strong to help lower inflation,&#8221; Ryan Sweet of Oxford Economics wrote the following.<\/p>\n<p>Daly stated Friday that the Fed will be focusing on progress in inflation to drive its policy decisions. The Fed&#8217;s preferred gauge for inflation showed that December saw inflation slow down from earlier this year.<\/p>\n<p>Daly warned that it is too early to conclude that inflation has peaked.<\/p>\n<p>&#8220;The direction of policy is for additional tightening and in holding that restrictive stance for some time,&#8221; She spoke. &#8220;We really will have to be in a restrictive stance of policy until we truly understand and believe that inflation will come squarely back down to our 2% target.&#8221;<\/p>\n<p>(Reporting by Ann Saphir, with reporting by Ankika Biwas, Caroline Valetkevitch Lindsay Dunsmuir and Lucia Mutikani; Editing done by Raissa Kazolowsky, Chizu Namiyama, Andrea Ricci<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Ann Saphir (Reuters) &#8211; To prevent too-high inflation in an economy that has seen a strong labor market despite nearly a year&#8217;s worth of Fed rate increases in 40 years, the U.S. Federal Reserve will likely need to raise the benchmark rate to 5% and maintain it there. This was Friday&#8217;s betting on financial &hellip;<\/p>\n","protected":false},"author":1,"featured_media":1834697,"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":[7498,5861,6009],"class_list":["post-1834694","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-fed","tag-hike","tag-rates"],"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\/1834694","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=1834694"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1834694\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1834697"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1834694"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1834694"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1834694"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}