Since March, the Fed has increased interest rates five times, bringing the benchmark rates from the near-zero level to the current 3.00%-3.25% range. Despite the Fed’s aggressive policy tightening this year, September’s Consumer Price Index (CPI) rose 8.2% year-over-year, exceeding market estimates.
Since inflation is still running hot and the economy grew in the third quarter, Fed policymakers are expected to deliver another supersized interest-rate hike this week in its two-day policy meeting. With Fed officials committed to maintaining their hawkish stance, they are laying the groundwork for borrowing costs to reach 5% by March 2023, possibly triggering a recession.
