“The time to taper rate hikes could come as early as the December meeting,” Powell said at a Brookings event in Washington on Wednesday. At the same time, however, he held out the prospect of further interest rate hikes.
A restrictive monetary policy will still be necessary for some time. The interest rate peak is likely to be slightly higher than signaled in September. At that time, the Fed had forecast a median interest rate peak of 4.6 percent according to the projections of the members. After all, inflation is still too high, Powell said. You need more signals for declining inflation.
At the most recent meeting in early November, the Fed raised its key interest rate sharply by 0.75 percentage points for the fourth time in a row. The Fed has already raised key interest rates from almost zero to currently 3.75 to 4.0 percent this year. The majority of the financial markets are expecting the Fed to raise its key interest rate by 0.50 percentage points in mid-December.
Inflation has already eased somewhat in recent months. In October, the annual inflation rate fell to 7.7 percent. In June it had still marked a 40-year high at 9.1 percent.
On the financial markets, the euro gained somewhat after the publication. US stock prices also rose.
Source: Nachrichten
