After several interest rate hikes by the US central bank of 0.75 and later 0.5 percentage points, election could already come in February. This was hinted at by the head of the Fed’s San Francisco branch, Mary Daly.
FOMC could slow interest rate hikes
The president of the San Francisco branch of the Federal Reserve, Mary Daly, is confident that the Federal Open Market Operations Committee (FOMC) could unexpectedly slow interest rate hikes at its closest monetary policy meeting at the turn of January and February.
According to Dalya, both a 0.5 and only 0.25 percentage point increase are in play. “I can present you with arguments for both options,” Daly said during an interview with The Wall Street Journal newspaper. The Fed, in her words, should reduce inflation as gently as possible. However, according to Daly, such a way will only be possible if there has been no upward easing of inflation expectations.
Nonetheless, Daly is confident that the base interest rate will have to rise as high as 5 to 5.25 from the current 4.25 per cent to 4.5 per cent. And at such a high level, it will have to persist until inflation falls back to the 2 percent target.
