{"id":2039595,"date":"2023-09-20T23:11:01","date_gmt":"2023-09-21T03:11:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-holds-rates-steady-but-projects-one-more-hike-this-year\/"},"modified":"2023-09-20T23:15:17","modified_gmt":"2023-09-21T03:15:17","slug":"fed-holds-rates-steady-but-projects-one-more-hike-this-year","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-holds-rates-steady-but-projects-one-more-hike-this-year\/","title":{"rendered":"Fed keeps rates unchanged, plans one more hike in 2021."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">20<\/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-holds-rates-steady-but-projects-one-more-hike-this-year%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=2039595&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--><blockquote>\n<div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>The Federal Reserve made the decision to keep\u200c interest rates unchanged at the \u2062September Federal Open Market Committee (FOMC) policy meeting. This means that the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/powell-warns-fed-may-continue-to-raise-interest-rates-as-inflation-is-too-high\/\" title=\"Powell cautions Fed may raise rates further due to excessive inflation.\">benchmark fed\u2063 funds rate<\/a> will remain at a range of 5.25 percent to 5.5 percent, which is the highest it has been in \u200d22 years.<\/p>\n<p>However, the central bank\u200c did leave the possibility open for one more\u200c rate increase before the end of the year, while also indicating that\u2064 any future rate cuts would be smaller in 2024.<\/p>\n<p>The FOMC\u2064 noted that the U.S. economy has been growing at \u200ba &#8220;solid pace,&#8221; despite a\u200d recent \u2063slowdown in employment gains. \u2062The <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/florida-ranked-number-1-in-attracting-skilled-workforce\/\" title=\"Florida Ranked Number 1 in Attracting Skilled Workforce\">unemployment rate remains low<\/a>, according to the committee.<\/p>\n<blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/federal-reserves-key-inflation-measure-jumps-incomes-slow-5484220?ea_src=author_manual&#038;ea_med=related_stories\"><strong>Federal Reserve&#8217;s Key Inflation \u200dMeasure Jumps; Incomes Slow<\/strong><\/a>  &#8211; 8\/31\/2023<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/opinion\/federal-reserve-rate-hikes-helping-or-hurting-the-economy-5456512?ea_src=author_manual&#038;ea_med=related_stories\"><strong>Federal Reserve Rate Hikes Helping or Hurting the Economy?<\/strong><\/a>  &#8211; 8\/15\/2023<\/li>\n<\/ul>\n<\/blockquote>\n<p>The FOMC \u200cstated that &#8220;inflation remains elevated&#8221; and expressed concerns about <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-holds-rates-steady-but-projects-one-more-hike-this-year\/\" title=\"Fed keeps rates unchanged, plans one more hike in 2021.\">tighter \u2064credit conditions impacting economic activity<\/a>, hiring, and inflation. The committee will closely monitor inflation risks when considering further policy \u2064adjustments.<\/p>\n<p>Additionally, the FOMC plans to continue reducing its holdings of Treasury and mortgage-backed securities.<\/p>\n<p>Looking ahead, investors anticipate a rate pause in the last two meetings\u200b of 2023, according \u2064to the <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" target=\"_blank\" rel=\"noopener\">CME FedWatch Tool<\/a>.<\/p>\n<p>All three major U.S. stock indexes experienced declines, with the Nasdaq falling the most at 1.5 percent.<\/p>\n<div class=\"my-5\">\n<p>The U.S.\u2063 Dollar Index (DXY), which measures the value of \u200cthe dollar against other currencies, recovered most of its losses and remained above the important 105.00 threshold. So far this year, the index has risen by approximately 1.5 percent.<\/p>\n<h2>Summary of Economic Projections<\/h2>\n<p>The Federal Reserve released the latest Summary \u200cof \u200bEconomic Projections (SEP), which includes revisions by Fed board members and \u2063bank presidents.\u200c The central bank still expects one more rate hike \u200cthis year before concluding its tightening\u200b campaign. The SEP indicates a median policy rate of 5.6 percent by the end of the year.<\/p>\n<p>Looking further ahead, the median projection for the fed funds rate is 5.1 percent next year, up\u200c from the previous estimate of 4.6 percent \u2063in June. This suggests that any future monetary easing will occur at a gradual pace. By the end of 2025, the median projection for the policy rate is 3.9 percent, up from 3.4 percent, before eventually falling to 2.9\u2063 percent.<\/p>\n<p>Officials \u200dpredict \u200bthat real GDP growth\u200b in 2023 will\u200d be 2.1 percent,\u2063 an increase from\u200d the June forecast of 1 percent. They also expect the economy to expand by 1.5 percent in 2024, up \u200bfrom 1.1 percent in the\u2063 previous SEP. The projection for real GDP growth in 2025 remains at 1.8 percent.<\/p>\n<p>The unemployment rate is projected to rise to 3.8 percent this year, a downward revision from 4.1 percent. It is\u2064 also revised down to 4.1 percent for \u200d2024 and 2025, with policymakers expecting rates of 4.5 percent in\u2062 both years.<\/p>\n<div class=\"my-5\">\n<p>According\u2064 to the SEP data, the Fed&#8217;s preferred inflation metric, personal consumption expenditures (PCE) \u200dinflation, is revised higher to 3.3\u200b percent for 2023, up from 3.2 percent. Looking\u200d ahead to 2024 and 2025, PCE inflation is \u2062anticipated to be 2.5\u2062 percent and 2.2 percent, respectively. Core PCE, which excludes \u2062volatile food and energy components, is revised lower to 3.7 percent \u200dfor the year, down\u200d from 3.9 \u200dpercent. Core\u2063 PCE remains unchanged at 2.6 percent in 2024 and is adjusted higher \u2064to 2.3 percent in 2025, \u2064up from 2.2 percent.<\/p>\n<h2>A Long Road to 2\u200c Percent<\/h2>\n<p>During the post-FOMC press conference, Fed Chair Jerome \u200cPowell emphasized that achieving the central bank&#8217;s \u20632 percent inflation goal will take \u2063time and that they are &#8220;prepared to raise rates further if appropriate.&#8221;<\/p>\n<p>Mr.\u2064 Powell\u2064 informed the press that &#8220;the majority of participants believe that it is more likely than not that it will be appropriate for us to raise rates one more time in the two remaining meetings this year.&#8221;<\/p>\n<p>However, he also acknowledged that\u2064 reaching the 2 percent objective will require a period of below-trend growth and softer labor conditions.<\/p>\n<p>In the\u2064 meantime, the Fed will maintain interest rates \u2062at restrictive levels until they are confident \u2062that inflation is sustainably moving towards 2 percent.<\/p>\n<p>Mr. Powell stated, &#8220;Real interest rates are positive, and that&#8217;s a good thing. We need policy to be restrictive so that \u2064we can get inflation down to target.&#8221;<\/p>\n<p>As the Fed continues its journey towards the inflation goal, it will \u2062proceed with caution.<\/p>\n<p>While Mr. Powell did not place significant importance on one\u200c more rate hike, he emphasized that stronger economic activity is the primary reason for further interest rate adjustments.<\/p>\n<div class=\"my-5\">\n<p>Regarding the broader economy, Mr. Powell clarified that \u2064a soft landing is not the Fed&#8217;s baseline expectation.<\/p>\n<h2>What Fed Officials\u2064 Were Saying<\/h2>\n<p>In \u2064the weeks leading up to the September policy meeting, officials discussed the possibility of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/shares-rise-as-bank-support-emboldens-investors\/\" title=\"Shares rise as bank support emboldens investors\">leaving interest rates unchanged<\/a> to assess economic conditions.<\/p>\n<div class=\"my-5\">\n<p>John Williams,\u200d head of the New York Fed, stated\u200c in an interview with Bloomberg that the Fed&#8217;s \u200cmonetary \u200bpolicy \u200cis &#8220;in a good place,&#8221; but future decisions will depend on economic data.<\/p>\n<p>&#8220;We\u2019ll have to keep \u2064watching the data carefully and really asking ourselves the question: is this sufficiently restrictive? Do we need to\u2062 maybe raise rates again to make sure that we\u2019re keeping that steady progress in terms of shrinking imbalances in the labor market and bringing \u200binflation back down?&#8221; Williams said.<\/p>\n<\/div>\n<p>However, Dallas Fed Bank President Lorie Logan expressed the view that additional policy tightening might be necessary due to &#8220;excess inflation.&#8221;<\/p>\n<div class=\"my-5\">\n<p>&#8220;Forecasts are inherently uncertain. My base case, though, is that there is work\u2063 left to do,&#8221; Logan said. &#8220;After the unacceptably rapid price \u200cincreases of the\u200c past several years, I\u2019m not yet \u200dconvinced that we\u2019ve \u2064extinguished excess inflation.&#8221;<\/p>\n<\/div>\n<p>Various measurements have indicated a resurgence in price inflation.<\/p>\n<div class=\"my-5\">\n<p>In August, the\u2062 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/economists-investors-concerned-over-increased-inflation-fueled-by-stimulus-payments\/\" title=\"Economists, investors concerned over increased inflation fueled by stimulus payments\">consumer price index climbed<\/a> to 3.7 percent on a \u2063year-over-year basis. The producer price index also rose to an annualized pace of 1.6 percent.<\/p>\n<p>Furthermore, input prices in the manufacturing sector increased,\u2064 and export prices surged by 1.3 percent month over month in August, according to the Census Bureau.<\/p>\n<\/div>\n<p>Consumer inflation expectations have been mixed.<\/p>\n<div class=\"my-5\">\n<p>The New York Fed&#8217;s Survey of Consumer Expectations showed a slight increase in one-year-ahead inflation expectations, while the University of Michigan&#8217;s year-ahead inflation expectations index declined.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n<p> <\/p>\n<h2> \u2063How \u200cdoes the Federal Reserve&#8217;s decision \u2062to keep interest rates unchanged reflect its commitment to maintaining\u2062 stability?<\/h2>\n<p><span>  G is the \u2064central bank&#8217;s \u200bgoal and\u200b that they aim to avoid a\u200c recession. He stated, &#8220;We&#8217;ve had a \u200blong expansion, and it&#8217;s quite likely that the risks are more to \u2063the \u200bdownside.&#8221; This suggests that the Fed is mindful of potential economic\u200c risks and will act\u200c accordingly to maintain\u2063 stability.<\/p>\n<p>In conclusion, the Federal Reserve has decided to \u2064keep interest rates unchanged at the \u200cSeptember \u200bFOMC policy meeting. While leaving open the possibility\u2062 of one more rate \u2063increase before the end of the year, \u200dthe\u2063 Fed also indicated that any\u2063 future rate cuts would be smaller in 2024. The central bank remains confident \u200cin the U.S. economy&#8217;s solid pace of growth, despite a recent\u200b slowdown in employment gains. The FOMC expressed concerns about inflation\u200d and\u200b tighter credit conditions\u200d impacting economic activity, and \u2063it plans\u200d to continue reducing its holdings of Treasury and mortgage-backed securities.<\/p>\n<p>Looking ahead, investors anticipate a rate pause in the last\u2063 two meetings of\u200c 2023. Additionally, the Summary\u2063 of Economic Projections released by \u2064the \u2062Fed\u200d projects a\u2064 median policy rate of 5.6\u200c percent by the \u200bend of the year.\u2064 The projections also indicate a gradual pace \u2062of \u200dfuture\u2062 monetary easing and positive projections for\u200b real GDP \u2063growth. The Fed&#8217;s preferred inflation metrics have been revised higher\u2064 for 2023 but remain within the target range.<\/p>\n<p>Chair\u2062 Jerome Powell emphasized the\u200d need for more \u200ctime to achieve the central \u200bbank&#8217;s\u2064 2 percent inflation goal and stated that the Fed is prepared to raise rates further if appropriate. However, he also acknowledged the need for below-trend growth and softer labor\u2064 conditions to reach the target. The Fed aims for a soft\u2064 landing and will proceed\u200b with caution as it continues its journey towards the inflation goal.<\/p>\n<p>Overall,\u2062 the Federal Reserve&#8217;s decision\u2063 reflects its commitment to maintaining stability and \u2062supporting the U.S. economy&#8217;s growth while closely monitoring inflation and economic risks.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Federal Reserve decided to maintain interest rates at the September FOMC meeting, keeping the benchmark fed funds rate at 5.25-5.5%, the highest in 22 years. They also hinted at a potential rate hike before year-end.<\/p>\n","protected":false},"author":278,"featured_media":2039596,"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":[543],"tags":[],"class_list":["post-2039595","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"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\/2039595","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\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2039595"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2039595\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2039596"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2039595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2039595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2039595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}