Bloomberg News reports officials of the Federal Reserve continued keeping the drumbeat of support up for the rise in interest rates. They have stressed the need to quash inflation, proving to be very stubborn.
On Thursday, five separate officials independently made a resolutely hawkish message wherein they stated that inflation is way too high and that they are not deterred by the rise in rates triggered by the market volatility.
It is being observed that the most aggressive tightening of inflation-related messages is being delivered by the officials of the Fed so that it can tackle inflation which is at a forty-year high. Starting from almost zero in March, the benchmark rate has been increased by the officials to a target rate between 3% and 3.25%, which also includes a back-to-back hike of 75 basis points at the last three meetings of theirs.
Eyes Set on Core Inflation Data
A recent median projection of the 19 policymakers’ reveals that there is likely to be another 1.25% increase in points over the remaining meetings of the last two years, with the investors keeping the pricing at a 75 basis point move when they meet on November 12. Forecasts of the Fed have revealed an additional 25 basis point hike in 2023, with the policy continuing to remain at restrictive levels until at least 2024.
Bloomberg News reports that the policymakers have expressed concern about core inflation. prices excluding food and energy, perhaps the most volatile sectors, were seen rising in August in the face of Fed rate tightening at a historical level.
Bloomberg News reports that the core consumer costs have risen by 6.3% in one year through August, marking an escalation in the last year through July by 5.9%. Data for September will be made available on October 13, and the same will be preceded by the closely watched monthly employment report Friday.
According to Fed President of Cleveland Loretta Mester, while talking to Council for Economic Education, the interest rates have to be raised so that the inflation can be put on a path of 2%.
