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Fed Likely to Raise Rates Today

The Federal Reserve is likely to increase interest rates again by 0.75 percentage points later today during its policy meeting, according to The Wall Street Journal (subscription).

Reading the tea leaves: “Equally important will be the signals Fed officials send about how much higher they expect to raise rates, and how fast they expect to do so, and what they expect the economic consequences to be.”

What’s next: While persistent inflation has not weakened the labor market, climbing housing and service costs have kept inflation high.

  • “Many analysts anticipate the new projections to show Fed officials expecting to raise the rate slightly above 4% this year.”

What we’re saying: “With inflation continuing to stay elevated—and particularly with news that core consumer prices strengthened in the latest data—the Federal Reserve will stay aggressive on the monetary policy front,” said NAM Chief Economist Chad Moutray.

  • “The Federal Open Market Committee will hike the federal funds rate by 75 basis points at the end of today’s meeting, and it is likely to hike rates by 50 basis points at both the Nov. 1–2 and Dec. 13–14 meetings.”
  • “This would bring the target federal funds rate to 4% to 4.25% at year’s end, up very sharply from zero to 0.25% at the beginning of 2021.”
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