Penultimate?
The Federal Reserve Open Market Committee raised their target for overnight interest rates 0.50%, as widely expected and as telegraphed by Fed Chair Jay Powell in a recent speech.
The rate hike, while still above the “normal” 0.25% move, represents a reduction in the breakneck pace of policy tightening in 2022 that included four consecutive 0.75% rate increases beginning in June. Today, overnight policy rates are in a range of 4.25–4.50%, which the majority of economists and Fed participants consider firmly in restrictive territory, meaning that interest rates are actively reducing economic growth even if they do not increase further. Today could represent the penultimate rate hike of the current cycle, depending on the evolution of inflation before the Fed next meets in February.
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