The US Federal Reserve raised interest rates on Wednesday, November 2nd, by 75 basis points for the fourth time while hinting at a potentially slower pace in the future. The rate hike brings the central bank’s policy rate, the federal funds rate, to a new range of 3.75% to 4%, its highest level since 2008. While Fed Chair Jerome Powell reiterated the central bank’s commitment to raising rates further to calm the multi-decade highs in inflation. In the press conference, Powell said interest rates might need to rise above the 4.6% previously estimated.
“In determining the pace of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation and economic and financial developments,” the policy statement iterated.
“No surprise here,” Advisors Capital Management Partner JoAnne Feeney said. “Growth is moderating, and I think that might suggest to the market that the end might be in sight for rate increases.” Stocks became green after the statement but then fell as Powell continuously told reporters that the Fed still ‘has a way to go’ in its fight against inflation.
