{"id":51953,"date":"2023-12-01T17:11:01","date_gmt":"2023-12-01T17:11:01","guid":{"rendered":"https:\/\/prosfunds.com\/business\/fed-chair-powell-too-early-to-say-when-to-expect-rate-cuts\/"},"modified":"2023-12-01T17:11:02","modified_gmt":"2023-12-01T17:11:02","slug":"fed-chair-powell-too-early-to-say-when-to-expect-rate-cuts","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=51953","title":{"rendered":"Fed Chair Powell: Too early to say when to expect rate cuts"},"content":{"rendered":"
\n

\n Investors have mostly concluded that the Federal Reserve is done hiking interest rates, and are already looking toward rate cuts next year, possibly as early as in the first half of 2024.\n <\/p>\n

\n Fed Chair Jerome Powell says: Not so fast.\n <\/p>\n

\n \u201cHaving come so far so quickly, the [Fed] is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,\u201d Powell said Friday in prepared remarks for a moderated discussion at Spelman College in Atlanta.\n <\/p>\n

\n \u201cIt would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,\u201d he said.\n <\/p>\n

\n Powell\u2019s comments come less than two weeks ahead of the central bank\u2019s upcoming policy meeting, on December 12-13. The Fed is widely expected to hold interest rates steady at a 22-year high for the third consecutive meeting.\n <\/p>\n

\n While Powell and other officials say they\u2019re not even thinking about cutting rates just yet, some investors expect cuts to begin around the middle of next year.\n <\/p>\n

\n For a frozen US housing market struggling with dwindling sales and record low affordability, loosening monetary policy bodes well for lower mortgage rates. The Fed does not directly set mortgage rates, but its actions influence them.\n <\/p>\n

\n Mortgage rates track the yield on the 10-year US Treasury note, which moves in anticipation of monetary policy moves, what the Fed ends up doing and investors\u2019 reactions. With Treasury yields sliding in recent weeks, so have mortgage rates, and rate cuts next year would help that along.\n <\/p>\n

\n Still, Powell and other Fed officials are apparently keeping one more hike on the table in case inflation proves to be more stubborn than anticipated \u2014 but that possibility is not reflected in futures. It\u2019s unclear how, or even if, the Fed will acknowledge an end to rate hikes in this cycle.\n <\/p>\n

\n So far, central bank officials are breathing more easily after the latest reading of the Fed\u2019s preferred inflation gauge showed that price hikes eased in October, after picking up earlier in the year due to rising energy costs, which have cooled markedly recently.\n <\/p>\n

\n In this year\u2019s seven Fed meetings so far, the Fed has hiked rates four times and held them steady three times. December\u2019s Fed meeting will likely bring that to an even split for this year.\n <\/p>\n

\n Inflation, spending and mortgages
\n<\/h2>\n

\n Consumer spending and inflation both eased in October, the Commerce Department reported Thursday. The core measure of the Personal Consumption Expenditures price index, which strips out volatile food and energy prices and is the Fed\u2019s favorite inflation measure, rose 3.5% in October from a year earlier, down from September\u2019s 3.7% rise.\n <\/p>\n

\n Meanwhile, the headline measure including all prices rose 3% during the same period, its weakest pace since March 2021.\n <\/p>\n

\n Consumer spending, which accounts for about two thirds of economic output, rose 0.2% in October from the prior month, down from September\u2019s 0.7% increase.\n <\/p>\n

\n Holiday spending so far has been robust, with Black Friday and Cyber Monday sales setting records. The Fed generally wants to see a slowing economy, since that is how rate hikes are meant to cool inflation. Economists are widely expecting the economy to ease from its red-hot pace of growth in the third quarter.\n <\/p>\n

\n But for the tens of millions of homeowners in America, what\u2019s going on in the housing market hits close to home, since housing costs make up a big chunk of people\u2019s monthly budget.\n <\/p>\n

\n The 30-year fixed-rate mortgage fell to an average of 7.22% in the week ending November 30, down from 7.29% in the prior week, Freddie Mac reported Thursday. A year ago, the average 30-year fixed-rate was 6.49%. Home affordability remains in doldrums, but that is expected to improve next year.\n <\/p>\n

\n Fed officials have broadly acknowledged that economic conditions are setting the stage for inflation to continue its descent. That includes a slower economy and \u201crestrictive\u201d interest rates.\n <\/p>\n

\n \u201cAll in all, it seems like output growth is moderating as I had hoped it would, supporting continued progress on inflation,\u201d Fed Governor Christopher Waller said earlier this week at an event in Washington.\n <\/p>\n

\n New York Fed President John Williams said Thursday that he expects inflation to fall slightly above 2% next year.\n <\/p>\n

\n \u201cWe\u2019ve gotten to a restrictive stance and things are moving in the right direction,\u201d he told reporters. \u201cNow we can assess whether we need to do more.\u201d\n <\/p>\n

\n Still, the New York Fed chief said \u201cadditional policy firming may be needed\u201d in case inflation\u2019s slowdown stalls, or even reignites.\n <\/p>\n

\n While some Fed officials have expressed optimism, others remain unconvinced that the Fed\u2019s job is done.\n <\/p>\n

\n Fed Governor Michelle Bowman said Tuesday at an event in Salt Lake City that she expects \u201cwe will need to increase the federal funds rate further to keep policy sufficiently restrictive to bring inflation down to our 2% target in a timely way.\u201d\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investors have mostly concluded that the Federal Reserve is done hiking interest rates, and are already looking toward rate cuts next year, possibly as early as in the first half of 2024. Fed Chair Jerome Powell says: Not so fast. \u201cHaving come so far so quickly, the [Fed] is moving forward carefully, as the risks […]<\/p>\n","protected":false},"author":1,"featured_media":51954,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-51953","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nFed Chair Powell: Too early to say when to expect rate cuts | Prosfunds<\/title>\n<meta name=\"description\" content=\"Investors have mostly concluded that the Federal Reserve is done hiking interest rates, and are already looking toward rate cuts next year, possibly as\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prosfunds.com\/?p=51953\" \/>\n<meta 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