Fed meets later in September and is expected to deliver another robust rate hike
Central bank will have to raise interest rates to restrictive levels and keep them there for ‘some time’US Federal Reserve's Lael Brainard speaks at the White House in Washington, the US, November 22 2021.Picture: KEVIN LAMARQUE/ REUTERS
US central bankers are raising interest rates rapidly to counter red-hot inflation after being slow to respond as prices began to surge in late 2021. They hiked by 75 basis points at their meetings in June and July and have left the same again on the table when they gather later in September, or a smaller half-point move, depending on the data.
Inflation was 6.3% for the 12 months ending July, according to the commerce department gauge targeted by the Fed, which aims for 2% inflation. While measures are showing some moderation, Brainard said it “will be necessary to see several months of low monthly inflation readings to be confident that inflation is moving back down to 2%”.
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