Highlights from today’s Federal Reserve announcement:
- Federal Reserve policymakers voted to keep lending rates unchanged but suggested one more rate hike might be implemented before the end of 2023.
- The Federal Open Market Committee (FOMC) is maintaining the target range for the federal funds rate at 5¼ to 5½%.
- Federal Reserve chair Jerome Powell indicated a rate hike before the end of 2023 may be considered and would depend on the direction of fundamental factors, such as inflation data at the time of the next two FOMC meetings on November 1 and December 13.
After a 2:30 p.m. EST press conference by Fed chair Jerome Powell, here’s what major media outlets reported:
The Wall Street Journal said policymakers are signaling higher rates may prevail longer than expected into 2024. “Because it can take a year or longer for rate increases to slow economic activity, officials have said a slower pace of hikes would allow more time to see how the economy is responding to them,” reported Nick Timiraos, The Journal’s Federal Reserve beat reporter.
“Fed officials are embracing a higher-for-longer strategy in which they only push interest rates slightly higher than they are now, but then hold those rates at elevated levels through most of next year,” Neil Irwin, who formerly covered economics at The New York Times, reported on Axios.
“Fed officials, indeed, appear to be growing more confident than ever in being able to cool inflation without a recession or a sharp rise in unemployment,” reported Ann Saphir of Reuters. “They expect economic growth to slow next year to about 1.5%, from 2.1% this year, and for the unemployment rate to go no higher than 4.1%, the latest quarterly summary of their projections shows.”
The FOMC meets for two days eight times a year and the Federal Reserve chair holds a one-hour press conference after each meeting answering questions posed by reporters from the most respected media outlets from the U.S. and global financial press. The Fed chair’s post-FOMC-meeting press conferences, live streamed on YouTube, are a vivid reminder of the transparency, strength, and unique qualities of the American economic system.