The central bank’s benchmark overnight lending rate currently sits in a target range of 3.75%-4.00%. Investors overwhelmingly expect a rate increase of 50 basis points at the Fed’s next policy meeting as inflation showed signs of cooling.
The Fed’s most aggressive monetary tightening campaign since the 1980s has so far had a fairly limited effect on demand overall. However, recent data shows that business activity contracted for a fifth month in November, and applications for unemployment benefits rose last week to a three-month high. This indicates that some more resilient parts of the economy have started to soften.
