Will The Fed Raise Rates Again? Powell Remains Fixated On 2% Inflation Target

In this article, we discuss the possibility of the Federal Reserve raising interest rates again and highlight Chairman Jerome Powell’s focus on achieving a 2% inflation target. We analyze Powell’s stance and its implications on future rate hikes, providing insights for investors and businesses seeking to understand the Fed’s monetary policy decisions. Stay informed about the potential impacts on the financial market and economic landscape.

Title 1: Federal Reserve Considers Rate Hike as Powell Reaffirms Inflation Target

Title 2: Likelihood of Rate Hike Increases Following Powell’s Speech at Jackson Hole Symposium

The recent speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium has strengthened the possibility of another policy rate hike by the Federal Reserve. During the speech, Powell reiterated the Fed’s commitment to achieving a 2% inflation target, despite concerns from some economists regarding the difficulty of reaching that goal.

Powell emphasized that the 2% inflation target remains steadfast, but acknowledged that attaining it would require a period of below-trend economic growth. However, the Fed has not witnessed the desired results so far, as the economy may not be cooling as expected.

Renowned economist Paul Krugman argued in a piece for the New York Times that the Fed should consider targeting a 3% inflation rate instead of 2%, as he believes the latter may be “bad economics”.

Following Powell’s speech, the likelihood of a rate hike at the Fed’s next meeting in September rose to 19%, as reported by the CME FedWatch tool. Additionally, the odds of another rate hike later this year reached a two-month high of 52.1%.

While rate cuts, which are anticipated to stimulate investment in cryptocurrencies and stocks, are not expected until June 2024.

Overall, Powell’s speech at the Jackson Hole Symposium has raised expectations for a rate hike by the Federal Reserve, as the Fed remains determined to achieve its 2% inflation target despite challenges. The likelihood of a rate hike in the near future has increased, which may have implications for various sectors of the economy.

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