A group of Democratic lawmakers have called on the Fed to halt rate hikes to avoid risking too much damage to the economy. The post Analysts Expect the Fed to Pause Rate Hikes Soon as Senators Weigh In appeared first on Tokenist.
The Federal Reserve has aggressively raised interest rates since March last year to combat higher inflation. While the central bank has managed to tame inflation somehow, the rate hikes have also slowed economic activity, with some even warning that it could cause a recession.
Senators Urge Fed to Stop Raising Rates
10 US senators and representatives, including prominent politicians like Senators Elizabeth Warren, Representatives Pramila Jayapal, and Brendan Boyle, have sent a letter to Powell before the Federal Open Market Committee meeting. The group has urged the central bank to halt rate increases to protect American jobs and small businesses.
“While the Fed should remain flexible to incoming data as it assesses the economy’s progress toward achieving lower inflation, the evidence to date suggests that progress can continue to be made without slamming the brakes on the economy and costing millions of Americans their jobs.”
Analysts Expect Fed to Stop Hikes After Wednesday
He suggested that a 25 basis-point rate increase to a target range of 5-5.25% was likely. Rieder added that this would be followed by an extended pause allowing the previous hikes to take effect.
He also claimed that he sees “a reasonable chance” the US could fall into “a shallow recession,” adding that he expects that the first half of 2023 “is going to look pretty good” before a “tangible slowdown” in the second half of the year.
Today at 2:00 PM ET, the Fed will announce its decision on interest rates. If the central bank proceeds with another rate hike, it would be the 10th increase since last year. Notably, the benchmark federal funds rate is already the highest since 2007.
Do you think the Fed would stop its rate hikes after today? Let us know in the comments below.