'You have to listen to the 10-year,' Wharton professor Jeremy Siegel says of his outlook for the Fed.
Over the past few weeks, officials have spoken largely in unison about the need to keep up the inflation fight, while also indicating they can pull back on the level of rate hikes. That means a strong likelihood of a 0.5 percentage point increase in December, but still an uncertain course after that.
Markets expect a few more rate hikes in 2023, taking the funds rate to around 5%, and then possibly some reductions before next year ends.from the FOMC added a sentence that markets interpreted as a signal that the Fed will be doing smaller increases ahead.
Investors saw it as a nod to a reduced intensity of hikes following four straight 0.75 percentage point increases that took the Fed's benchmark overnight borrowing rate to a range of 3.75%-4%, the highest in 14 years.Several Fed officials have said in recent days that they anticipate a likely half-point move in December.
"They're getting to a point where they don't have to move so quickly. That's helpful since they don't know exactly how much tightening they're going to have to do," said Bill English, a former Fed official now with the Yale School of Management. "They emphasize policy works with lags, so it's helpful to be able to go a little bit more slowly."
Inflation data lately has been showing some encouraging signs while remaining well above the central bank's 2% official target.
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