The Federal Reserve has raised its interest rates a further .75%. Thus, increasing the total for the year to 3.25% worth of rate hikes. This time around, Jerome Powell was very transparent about what was to come to reach the end goal of getting back to 2% inflation. His idea of a “soft landing” looks like a thing of the past. Powell implied, that a recession is now more likely than ever before.
The labor market, housing market, and inflation reports continue to support the Fed’s claim to stay the course they have set for the foreseeable future.
While the beginning of the press conference was gloomy, it ended on a high note with the hopes of easing off the restrictive monetary policy we have seen over 2022. The case can be made for smaller and less frequent hikes in 2023 as the Federal reserve reaches its “terminal rate” for interest rates around 5.5-6%. The key takeaway from all of this is to act now. Put yourself in the best financial position possible between now and the year-end. We are nearing the summit of inflation, there is a positive outlook to come next year and all the economic changes we will see.