The Federal Reserve recently raised interest rates by 25 basis points, the smallest increase since it began hiking rates in March last year. While Fed Chair Jerome Powell acknowledged that a “disinflationary process has started,” he cautioned that further rate increases are still likely.
Furthermore, the January jobs report showed that employers added a robust 517,000 jobs, exceeding the estimate of 187,000, and the unemployment rate fell to 3.5%, a 53-year low. The labor market’s surprising strength evoked concerns on Wall Street that the Fed’s monetary tightening policy has not sufficiently slowed the economy and raised the prospect for aggressive rate hikes.
