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Fed expects 2nd rate hike in 2023, stock markets slump, Powell fears higher inflation – Economics Bitcoin News


The Federal Reserve told the public on Wednesday that it has extended the deadline for raising interest rates. “Progress on vaccination will continue to mitigate the impact of the public health crisis on the economy, but risks to the economic outlook remain,” the Federal Open Market Committee (FOMC) said in a statement.

The meeting before the ‘meeting’ – the Fed expects two rate hikes in 2023

  • After several market players waited for the Federal Reserve to reveal some signs, they found some on June 16, when 13 of the FOMC’s 18 committee members rate hike forecast by the end of 2023.
  • “You can think of this meeting we had as a meeting to ‘talk about talking,'” Federal Reserve Chairman Jerome Powell said on Wednesday. The ‘meeting’ refers to the Powell where the FOMC raises interest rates after pressing rates to zero.
  • The so-called plot of individual member interest rate expectations shows the possibility of two interest rate hikes in 2023. The Fed believes that at the end of 2021, the unemployment rate will be around 4.5%.
  • “The problem now is that demand is very strong, income is high, people have money in their bank accounts. The demand for goods is very high, and it has not decreased,” Powell explained on Wednesday. “But in the case of over-correction, on the other hand there is a possibility that inflation could actually be quite low. But that is not our focus right now.”
  • In the press conference after the meeting, Powell discussed inflation. “Our expectation is that these high inflation readings will now subside,” Powell stressed to the press. Inflation expectations rose to 3.4% in statements after the Fed’s meeting.
  • Powell commented, “We in no way rule out the chance that this could work out for longer than expected, and the risk would be that, over time, it could affect inflation expectations.” begins.”
  • “We are on our way to a very strong labor market,” Powell also said at a post-meeting news conference.

  • Dow Jones Industrial Average or Dow dropped 260 points Following signs of a rate hike by the Fed on Wednesday.
  • “With regard to inflation these are the factors that have controlled it over the past 25 years, and Powell expects it to continue to hold it temporarily in the future,” said Peter Schiff, economist and gold bug. wrote On Wednesday after the FOMC meeting. “After years of reckless Fed monetary policy, the inflation chickens are finally coming home,” Schiff said.
  • The Fed has ignored all requests to slow down purchases.” said Northmantrader.com Founder, Sven Heinrich, after the Fed’s committee meeting. “Powell cut the rug from under any dissenters on the committee, during the depths of the GFC/the hottest economy in 50 years, inflationary pressures and an emphasis on printing more than the largest asset bubble in history.”
  • “The market didn’t expect it,” said James McCann, deputy chief economist at Aberdeen Standard Investments. Explained In an interview with CNBC. “The Fed is now indicating that rates will need to be raised sooner and more rapidly, with their forecast suggesting two hikes in 2023. This change in stance has little to do with recent claims by the Fed that the recent rise in inflation The spike is temporary.”

What do you think of the Fed explaining that it could raise interest rates twice in 2023 and expects higher inflation levels? Let us know what you think about this topic in the comment section below.

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