Fed Chairman Jerome Powell has said a hike will depend on the economic data. The Fed next meeting on Oct. 31- Nov. 1.
Officials think they are close to a level of rates that will gradually bring down inflation without a recession. Only one of the 19 Fed officials expects the Fed to need to raise rates above 6% next year.
In their policy statement, Fed officials upgraded their assessment of the economy, saying that activity was expanding at a “solid pace,” up from the description in July of “moderate” growth.
Officials revised up their forecast for growth higher this year and next.
Core inflation was revised down this year but the expectation for a 2.6% rate in 2024 was kept. Inflation won’t return to the Fed’s 2% target until 2026.
Fed officials are divided on about the future path or rates.
One camp wants to stand pat. The other thinks more hiking is likely needed.
According to the longer-run forecast, the Fed’s target rate would sink a range of 3.75%-4% in 2025 and 3.75%-4% in 2026.
