The Federal Reserve likely needs to raise interest rates above 3.5% and keep them there until 2024, New York Fed President John Williams on Tuesday.
The Federal Reserve likely needs to get its benchmark interest rate “somewhat above” 3.5% level to slow the economy, said New York Fed President John Williams, on Tuesday. That level would be “restrictive” and able to slow down demand.
“It... The Federal Reserve likely needs to get its benchmark interest rate “somewhat above” 3.5% level to slow the economy, said New York Fed President John Williams, on Tuesday. That level would be “restrictive” and able to slow down demand. “It is going to take some time before I would expect to see any adjustment to rates downward,” Williams said.Williams is a close ally of Fed Chairman Jerome Powell. His comments add detail to Powell’s short speech in Jackson Hole last Friday in which Powell said the Fed must continue to raise interest rates and hold them at a higher level to bring inflation under control even if unemployment increases.
Traders who bet on Fed moves in the federal funds futures market see a 73% chance that the Fed will raise its policy rate by 0.75 percentage point at the meeting, which would be the third straight large hike. Some economists are expected the Fed to step down to a half percentage point hike.
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