Important Statement from the Senior FED Official: Announced How Many More Rate Increases There Will Be!

Boston Fed Chair and member of the Federal Open Market Committee (FOMC) that sets the US monetary policy, Susan M. Collins, said on Wednesday that she expects another quarter-point rate hike this year to help curb very high inflation.

He also said that the FED will use all necessary tools to counter the stress in the financial markets, which somewhat relieves the pressure on it to further tighten policy.

“I currently anticipate a modest additional policy tightening and then wait until the end of this year,” he said, adding that he supports the Fed’s projections for this month and that most officials support an increase in the federal funds rate to 5% to 5.25% (25 basis points) this year. .

The Fed’s benchmark interest rate currently hovers between 4.75% and 5%.
However, Collins acknowledged that the economy is facing some challenges, particularly from the financial sector, which has been hit by a wave of bank failures and credit crunch.

Collins said banks are likely to tighten credit standards and reduce credit availability, thus contributing to slowing the economy and reducing inflationary pressures. He said these developments may partially offset the need for additional rate hikes.

In his statement, Collins emphasized his belief that the Fed can achieve what is called a “soft landing” and avoid a recession by reducing demand through higher borrowing costs.

*Not investment advice.

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