Goldman Sachs analysts recently predicted that due to the latest inflation data Federal Reserve (Fed) likely to pause raising interest rates at its annual meeting at the end of next month.
However, Federal Reserve Chairman Jerome In his latest speeches, Powell has anticipated the possibility of increasing interest rates two more times by the end of this year, after meetings and approval by the Federal Open Market Committee.
Until now, The eleventh increases in interest rates position the rate in the range of 5.50%, With inflation that has proven inconsistent and resistant to slowdown, according to data from the Bureau of Labor Statistics, the Consumer Price Index rose 0.6%, placing inflation at 3.7% for the month of August, compared to with 3.2% of the previous month.
However, the Goldman Sachs report highlights that “in November, we believe that further rebalancing of the labor market, better news on inflation and the likely slowdown in fourth-quarter growth will convince more participants that the FOMC (Federal Management Committee Open market) may forego a final increase this year, as we believe it will ultimately”.
The Fed’s objectives remain clear, to bring inflation to 2%, but the inflation rate has put up a fight since last year when it reached its maximum of 9.1%policymakers’ decisions are based on economic reports, if inflation shows signs of cooling, interest rate cuts may begin.
For their part, projections from JP Morgan Asset Management and Janus Henderson Investors indicate a 98% probability that the Federal Reserve will leave interest rates unchanged at the next meeting.
Jim Baird, CEO of Plante Moran Financial Advisors, said that “whether another increase could be on the table later this year will depend on the tone of incoming data in the coming months.”
Finally, it is also expected that next week between Tuesday, September 19 and Wednesday, September 20 The Federal Reserve increases its economic growth projections for 2023 from 1% to 2.1%. “Given the totality of recent data and the Fed’s previously stated mindset around rate policy, policymakers appear poised to hold firm next week,” Jim Baird said.
Keep reading:
Source: La Opinion
