Inflation moderation, is it enough for the Fed to ease up on rate hikes?
- Key to when the Fed’s job is seen as largely done will likely be stabilization in areas like housing, purchasing managers indexes (PMIs) and consumer/CEO confidence. The Fed has telegraphed an eventual step-down and pause in rate hikes, which is likely within 2023’s first half. – Liz Ann Sonders, Chief Investment Strategist, Charles Schwab
- Fed Chair Powell indicated the Fed would proceed on its tightening course with “moderation,” to avoid setting off a recession. The FOMC is on track to raise the federal funds rate by 50bps at the December 13-14 meeting – Bob Doll, Crossmark Global Investments.
- We anticipate a sustained moderation in inflation, which should provide the Fed with some breathing room. In our view, the majority of rate hikes is likely behind us. That said, we don’t expect inflation to decelerate at a rapid pace from here, mainly because key components of services inflation, such as shelter/rent, continue to exhibit “sticky” prices. – Saira Malik, CFA, Chief Investment Officer, Nuveen
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