![]() ![]() However, the second half of the year depends on how the economy fares, if it weakens, then the Fed could be cutting rates later in 2023. ![]() The Fed is likely to raise rates by a quarter point to a range of 4.5 to 4.75 percent at this meeting. ![]() In 2023, the first half of the year is expected to see the Fed reach a point where it can hold rates steady. Here’s what to watch for in the Fed’s statement and news conference. However, high rates are also disrupting the housing market. The Fed expects holding rates here to be effective in bringing down inflation, and we’re seeing some signs that that may be working in late 2022, based on softer inflation numbers. Rates at this level are viewed as restrictive for the economy. The Fed may hold rates within a 4% to 5% band for some time in 2023. However, this is viewed as a less likely scenario currently. However, some fear that prospects of a recession, will mean that the Fed may feel the need to cut rates later in 2023. This means that Fed may reach a point to hold rates steady around the spring. Smaller hikes at the February and March meetings are considered probable, based on interest rate futures. ![]() An increase in rates is expected at the Fed’s last meeting of 2022. The question is how soon, and at what level, the Fed stops hiking rates.ĭespite a move to a pause in rates, that may not occur rapidly. Should inflation data continue to ease, then it’s likely the Fed will cease hiking rates aggressively. The key question that is likely dominate early 2023 is how to handle a pause in interest rates. Of course, the Fed can set rates whenever it wishes, but we’ll only see rate decisions in these months if something more dramatic happens to the economy. In 2023, there won’t be any rate announcements in January, April, August and October. The yield on the 10-year Treasury note inched down to 3.84% after hitting the highest level of the year on Thursday.Ĭopyright (c) 2023 Dow Jones & Company, Inc.The Fed doesn’t set rates every month. stocks were lower on the prospects of higher interest rates. "I would certainly counsel.going 25 at the next meeting and signaling that in May," Clarida said. Meanwhile, former Fed Governor Richard Clarida said he would advise the Fed to engineer two 25-basis-point hikes. The Fed will weigh the February employment and inflation reports prior to their next meeting in March. Some economists say the data will tell the tale. Read: Will the Fed return to 50-basis-point rate hikes? While Bullard and Mester were careful to avoid saying anything about the next Fed interest-rate committee meeting on March 21-22, that didn't stop some economists and market analysts from speculating the Fed might reaccelerate the pace of rate hikes at the meeting. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester, said they had urged their colleagues at the last meeting for the Fed to maintain that 50-basis-point pace. Over the last three meetings, the Fed steadily slowed slowed the pace of rate hikes - from 75-basis points in November to 50 basis points in December to a quarter-point earlier this month. In a talk with reporters after a speech in Northern Virginia, Richmond Fed President Tom Barkin said he likes 25-basis point moves because it gives the central bank flexibility, according to several reports on the conversation With questions swirling in the market about whether the Federal Reserve might want to engineer more aggressive interest rate hikes in the wake of the strong job growth and stick inflation in the recent economic data, one central bank official said he wants to stick to smaller moves in the future. Small moves give central bank flexibility, says Richmond Fed president says ![]()
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