Is this Bidenomics? "We're taking advantage of the fact that we have moved quickly to move a little more carefully now," Federal Reserve Chair Jerome Powell told a gaggle of reporters yesterday in reference to the Fed's decision not to hike interest rates further. Rates are currently hovering at 5.25–5.5 percent, and the Federal Reserve has, for the past 18 months, been aggressive with raising them in an attempt to cool runaway inflation.
But yesterday, the Associated Press reported that "the 19 members of the Fed's rate-setting committee conveyed growing optimism that they will manage to slow inflation to their 2% target without causing the deep recession that many economists had feared" (also called a "soft landing"). Powell and the rest of the rate-setting committee did note that rate hikes are still absolutely possible as the year progresses, but that the current state of inflation coupled with low unemployment and strong economic growth means there's reason for optimism that inflation will cool back down to their target by 2026. "Fed officials now expect their benchmark rate to be at 5.1% by the end of next year, according to their median estimate, up from 4.6% in the last projection round in June," according to Bloomberg. Basically, it's shaping up to look like interest rates won't be hiked higher, but that inflation will likely be around longer than many had previously predicted.
