WASHINGTON —
The wide range of potential outcomes could provoke divisions among Fed officials, even as they’re expected on Wednesday to raise their benchmark rate to 5.1%, the highest level in 16 years. The big question is whether the Fed will also signal Wednesday that it’s now inclined to pause its rate increases — barring any re-acceleration of inflation — and keep its key rate unchanged for the rest of 2023 as it assesses its progress in cooling inflation.
“I think we need to be cautious,” Goolsbee said. “We should gather further data and be careful about raising rates too aggressively.” That divergence reflects the fraught path confronting the Fed. When inflation was spiking to a peak of 9.1% last June, the Fed was mostly united in its support for fast and aggressive rate increases. Now that its key rate is at a level that should restrict growth and inflation has slowed to 5% as of March, unanimity could be harder to maintain.
Both developments could weigh on an already slowing economy. The Fed wants the economy to cool somewhat, because less borrowing and spending should also help rein in inflation. But particularly if political battles around the debt ceiling worsen, the economy could fall into a deep enough recession that the Fed might be forced to cut interest rates sometime this year — even if inflation isn’t fully in check.
Loans Loans Latest News, Loans Loans Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: WOKVNews - 🏆 247. / 63 Read more »
Source: WOKVNews - 🏆 247. / 63 Read more »
Source: ksatnews - 🏆 442. / 53 Read more »
Source: CBSNews - 🏆 87. / 68 Read more »