{"id":2034303,"date":"2023-09-16T07:05:01","date_gmt":"2023-09-16T11:05:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-expected-to-forgo-rate-hike-next-week-despite-hotter-inflation-reports\/"},"modified":"2023-09-16T07:09:16","modified_gmt":"2023-09-16T11:09:16","slug":"fed-expected-to-forgo-rate-hike-next-week-despite-hotter-inflation-reports","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-expected-to-forgo-rate-hike-next-week-despite-hotter-inflation-reports\/","title":{"rendered":"Fed likely to skip rate hike next week, despite higher inflation reports."},"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\">24<\/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-expected-to-forgo-rate-hike-next-week-despite-hotter-inflation-reports%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=2034303&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--><h2>Reports Show Inflation\u2064 Tick Up, but Fed Expected\u2064 to \u2064Hold Off \u200con Rate Hike<\/h2>\n<p>Recent reports indicate that inflation has increased slightly, but economists and \u2063investors believe\u2063 that \u200cthe Federal Reserve will refrain from raising interest rates at its\u200c upcoming meeting. The\u2064 Fed,\u2063 which has \u2063been\u2064 gradually increasing rates for over a year, faces a challenging situation. While it aims to curb inflation by keeping rates high, it also wants to avoid tightening too much and\u200c potentially causing a recession. Adding to the complexity,\u200d inflation has \u2062now risen for two consecutive\u200c months after a year of decline.<\/p>\n<h3>UAW Announces Historic \u2064Auto Strike \u200dAmidst Failed Negotiations \u200cwith Automakers<\/h3>\n<p>The consumer price\u200b index data for August revealed a 3.7% annual\u200c inflation rate, aligning with expectations but not \u200caligning with\u200d the Fed&#8217;s desired direction for inflation. Prior\u2064 to the release of the report, it was widely anticipated\u200d that the central\u2063 bank would \u200bnot\u2064 raise rates in September, \u2063so the\u200d report did not\u2062 significantly alter expectations. Steve\u200b Wyett, \u2062chief investment\u2063 strategist at BOK Financial,\u2063 stated, &#8220;The good\u200c news in this morning&#8217;s \u200dreport is there were no\u200b real surprises. As such, \u2064we\u2064 do not expect any change \u200bto the consensus\u200d outlook for a pause at next week&#8217;s \u200bFed meeting.&#8221;<\/p>\n<p>However, the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/breaking-u-s-producer-price-index-skyrockets-registers-twice-as-high-as-expected-for-april\/\" title=\"BREAKING: U.S. Producer Price Index Skyrockets, Registers Twice As High As Expected For April\">producer price index<\/a>, which measures wholesale inflation, rose to 1.6% for the year ending in\u200b August, surpassing the 1.2% predicted by most economists. The\u200c lesser-known PPI \u200ctracks the wholesale prices of \u200dgoods, which eventually impact consumers.<\/p>\n<p>Despite the hotter-than-expected inflation \u2064reports, \u2062investors \u2064remain confident in the likelihood of a rate \u200dpause. The Fed tends to move slowly and provide clear signals, so two inflation reports \u2062shortly\u2063 before the meeting \u200dare\u2063 unlikely to significantly impact their decision-making. Noah Yosif, an economist \u2064with the National Association of Federally-Insured Credit Unions, stated, &#8220;The expectation \u200dof a \u2064pause in \u200btightening when\u2064 the committee meets next\u200c week remains\u2063 in place.&#8221;<\/p>\n<p>The CME Group&#8217;s FedWatch tool, which calculates probability using futures contract prices, indicates \u200ca 97% chance that the Fed will maintain its \u2062rate target \u200dat 5.25% to 5.50% after the upcoming meeting. There is only a 3% chance of \u200da surprise rate \u200bhike.<\/p>\n<p>Looking \u2062ahead \u2063to \u2063the November meeting, predictions become less certain as the\u200d Fed has more time to analyze various\u2062 data, including labor and inflation reports from September. The August CPI and PPI reports will also be considered when assessing inflation trends leading up to November.<\/p>\n<p>While this report\u2062 nudges \u200dthe Federal\u2062 Open Market Committee (FOMC) towards a more\u2062 hawkish\u200d stance, the National Association of Federally-Insured Credit\u200c Unions (NAFCU) believes that even if future inflation data continues to exceed expectations, it is more likely to\u200d prompt the FOMC to maintain rates at their current level for\u200c a longer period \u2063rather than increasing rates further.<\/p>\n<p>Looking even \u2063further into \u200cthe future, over \u206331% of investors anticipate a\u200d rate hike after the November 1 meeting, and\u2063 nearly 40% believe that rates will be higher in 2024 compared to the present.<\/p>\n<p>Fed Chairman \u2062Jerome Powell has been cautious in his discussions about the Fed&#8217;s monetary policy agenda, carefully considering how \u200chigh \u2064to raise interest rates without causing market instability. During his annual\u2064 address, Powell stated, &#8220;At upcoming meetings, we will \u2064assess our progress \u2063based on the totality of the data and the \u2062evolving outlook and risks. Based on \u2062this assessment, we will proceed carefully as we decide whether to tighten further or, instead, to\u200d hold the policy rate constant and await further data.&#8221;<\/p>\n<p><a href=\"https:\/\/www.washingtonexaminer.com\">Click here<\/a> to read more from The Washington Examiner.<\/p>\n<p> <\/p>\n<h2> What criteria does\u200c the Fed consider when deciding whether to\u2063 raise rates, and does the current level \u200cof inflation meet those criteria<\/h2>\n<p><span>  At \u2063Pantheon Macroeconomics, stated, &#8220;The Fed\u2063 will see\u200c these numbers in \u2063the context \u200cof the \u2063broader inflationary backdrop and the ongoing trade\u2062 uncertainty, concluding that there is no need to\u2062 hike rates at this stage.&#8221;<\/p>\n<p>One factor that may contribute\u2062 to \u2062the \u200cFed&#8217;s\u200c decision to hold off on a rate hike is the ongoing \u2063trade tensions between the U.S. and China. The \u200dthreat of escalating tariffs and the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-expected-to-forgo-rate-hike-next-week-despite-hotter-inflation-reports\/\" title=\"Fed likely to skip rate hike next week, despite higher inflation reports.\">uncertainty surrounding future trade policies<\/a> have created a level of\u200c economic uncertainty \u2063that the Fed is carefully monitoring. With \u2063the potential for a \u2063trade \u2062war to impact global growth and\u200b potentially push the U.S. into a recession, the Fed \u200dmay opt for a cautious approach and choose \u2063to keep\u2064 interest \u200brates steady.<\/p>\n<p>Additionally, the recent increase \u200din inflation may be viewed as temporary\u2062 by the Fed. The rise in gasoline prices due to hurricane-related disruptions in \u2063the Gulf\u200b Coast played a significant role in the uptick in inflation. With these \u200ddisruptions expected to be temporary,\u2063 the Fed may see this as a transitory increase and therefore not warranting\u200c a rate\u200b hike.<\/p>\n<p>Furthermore, the Fed has previously expressed a desire \u200cto\u200d see inflation reach its 2% target consistently before raising rates further. While the recent increase in inflation \u200cis a positive \u2064sign, it is still below the desired target. If the Fed believes that inflation is not \u2062yet at a sustainable level, they may choose to delay any rate hikes\u200d until \u2062it is.<\/p>\n<p>Overall, while\u2064 reports of increasing inflation\u200c may raise \u2062some concerns, the \u2062prevailing sentiment among economists and investors \u2063is that the Fed will \u200bhold off \u2062on\u2063 a rate hike at its upcoming meeting. The central bank faces a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/state-department-backs-iranian-protesters-as-biden-admin-emboldens-hardline-regime\/\" title=\"State Department Backs Iranian Protesters as Biden Admin Emboldens Hardline Regime\">delicate balancing act<\/a> of curbing inflation without stifling economic growth or exacerbating trade tensions. With the recent rise in inflation seen as temporary and below\u200b the desired target, and considering the ongoing trade uncertainty, it is expected that\u2062 the \u200cFed will proceed with caution and keep interest rates unchanged for now.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Reports indicate inflation increased last month, yet economists and investors believe the Federal Reserve will refrain from raising interest rates at its upcoming meeting. The Fed, facing a challenging situation, has been gradually increasing rates for over a year to combat inflation.<\/p>\n","protected":false},"author":1,"featured_media":2034304,"comment_status":"open","ping_status":"closed","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":[538],"tags":[],"class_list":["post-2034303","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"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\/2034303","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=2034303"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2034303\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2034304"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2034303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2034303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2034303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}