Between March 2022 and July 2023, the FOMC increased the Fed funds rate from a range of 0.0%-0.25% to 5.25%-5.5%, resulting in a significant decrease in inflation. Tuesday's consumer price index is predicted to show a 0.1% month-over-month rise, and 3.3% in comparison to the same period of the preceding year, according to a Dow Jones survey of economists.
Jim Bullard, the former President of the St. Louis Federal Reserve, noted that there is still potential for inflation to pick up. He mentioned that the Federal Open Market Committee (FOMC) had executed an 11-rate hike period between March 2022 and July 2023, leading to an apparent reduction in inflation. The fed funds rate target range now stands at 5.25%-5.5%. Despite markets believing rates have reached a peak and expecting cuts next year, Bullard argued that the central bank's work is not yet done. He said, "Inflation has come down, core PCE inflation on a 12-month basis down from 5.5% to 3.7% — pretty good but that's still only halfway back to the 2% target so you've still got a ways to go. I think you have to watch the data carefully and it's very possible that inflation will turn around and go the wrong way."
Tuesday's anticipated release of October's consumer price index is expected to show a 0.1% month-on-month rise and a 3.3% year-on-year hike, as per a Dow Jones poll of economists. Bullard remarked that the Federal Open Market Committee (FOMC) runs the risk of the recent 12-month disinflation not enduring into the future, necessitating further measures. He also stated that the risk of the United States falling into recession in the following year is estimated at 15%, with economic growth expected to continue in line with a "soft landing" as disinflation progresses. Bullard noted that recessions only occur around one every decade and that, being caused by unpredictable shocks, 2024 should not be considered as a baseline for a potential economic downturn. To correct an earlier version, the FOMC raised the federal funds rate between March 2022 and July 2023, from a range of 0.0%-0.25% to a target range of 5.25%-5.5%.
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