Expected

At the same time, the Fed is expected to signal that it plans more hikes next year than it had previously forecast to conquer inflation.

And with average wages growing at a brisk 5%-6% a year, price pressures keep building in that sector of the economy. Powell and other Fed officials have said they hope their rate hikes will slow consumer spending and job growth. On Wednesday, the policymakers may forecast a higher unemployment rate by the end of 2023. [sharp increases in wages are becoming a key contributor to inflation](https://apnews.com/article/inflation-business-pandemics-jerome-powell-federal-reserve-system-01ca0f8ac5439f764827fb89d18a51e7). Despite Powell’s recent hard-line remarks — he said late last month that “we have not seen clear progress on slowing inflation” — he and other Fed officials have made clear that they’re ready to dial down the pace of rate hikes. “Downshifting helps to maximize their prospects of a soft landing,” in which the Fed’s rate hikes would slow growth and tame inflation but not tip the economy into a recession. The six rate hikes the Fed has already imposed this year have raised its key short-term rate to a range of 3.75% to 4%, its highest level in 15 years. And most economists think Chair Jerome Powell will stress that the Fed will likely keep its benchmark rate at its high point through next year, even after the hikes have ended. Fed officials have stressed that more important than how fast they raise rates is how long they keep them at or near their peak. Some of those trends extended into last month’s data, with goods prices, excluding food and energy, falling 0.5% from October to November, the second straight monthly drop. On Wednesday, members of the Fed’s rate-setting committee will also update their projections for interest rates and other economic barometers for 2023 and beyond. “Given the tightening already in the pipeline, I am mindful that monetary policy works with long lags.”

The Fed is expected to raise the interest rate by 0.50 percentage points but people will be looking for clues to when it plans to stop and pivot.

Most economists expect the Fed to raise its median forecast for the fed funds rate to around 5% from 4.6% in September, the last time it released its projections. [What's a Fed pivot?] [A Fed pivot is when the Fed reverses its current policy.] [In this case, since the Fed is in an interest rate hiking cycle, it would mean the Fed would start lowering rates. [What is discount rate?] [Discount rate is the interest rate the Fed charges to commercial banks and other depository institutions on loans from their regional Federal Reserve Bank's lending facility, or discount window.] [These loans give banks and other institutions ready access to money and support the smooth flow of credit to households and businesses.] [What is prime rate? It also boosted its 2023 median forecast for the rate to 5.1% from 4.6% in its September projection as it raised its personal consumption expenditures (PCE) price index forecast to 3.1%, from 2.8% in its last forecast. In 2024, its median forecast is for the rate to drop to 4.1% and then further to 3.1% in 2025. ] [In 2024, though, that median forecast for the fed funds rate drops by 100 basis points to 4.1%, suggesting 2024 will be the year for rate cuts.] The Fed’s median projections in September for the unemployment rate were 3.8% this year, and 4.4% in both 2023 and 2024, and a touch lower in 2025 at 4.3%. If the federal funds rate is rising, banks might pass on additional interest costs in the form of higher interest rates on consumer and other borrowing, but also increase the rates they pay their depositors.] Its median forecast is for the rate to rise to 5.1%, up from its 4.6% forecast the last time it released its projections in September. Its median forecast for the jobless rate is 4.6% in 2023 and 2024, up from 3.7% this year. [Despite stock rally, recession in 2023 is still likely as Fed continues to raise rates](https://www.usatoday.com/story/money/2022/11/16/we-heading-into-recession-experts-say-yes-despite-market-rally/10704346002/) [How high will Fed interest rates go?] [The Fed now expects the rate to end 2023 at a range of 5% to 5.25%, higher than the 4.5% to 4.75% it projected in September, according to policymakers’ median forecast. In a statement after a two-day meeting, the Fed reiterated that “ongoing (rate) increases…will be appropriate” to bring down yearly inflation to the Fed’s 2% goal.

The Federal Reserve is expected to raise interest rates by a half point Wednesday as efforts to curb inflation show progress. November's annual inflation ...

And that's one of the ways they're going to keep inflation in check. HORSLEY: Today's rate hike is expected to be smaller than the last four, and some forecasters think the Fed will pause altogether after maybe one more rate increase in February. The money is still going to be more expensive and tighter. Home sales and home construction have declined, and prices for home furnishings are starting to come down as well. The central bank has already raised its benchmark borrowing rate six times this year from near zero in March to just under 4% now. A report on Tuesday showed inflation dipped from an annual rate of 9% in June to just over 7% in November.

The inflation rate is down to 7.1%, a drop of 2% since hitting the highest rate in 40 years back in June. In an effort to continue the trend of slowed ...

The "Sweeteners Market Size, Share & Trends Analysis Report by Type (Sucrose, Tagatose), by Form (Solid, Liquid), by Application (Bakery & Confectionery, ...

The Federal Reserve is expected to raise interest rates by a half point Wednesday as efforts to curb inflation show progress. November's annual inflation ...

And that's one of the ways they're going to keep inflation in check. HORSLEY: Today's rate hike is expected to be smaller than the last four, and some forecasters think the Fed will pause altogether after maybe one more rate increase in February. The money is still going to be more expensive and tighter. Home sales and home construction have declined, and prices for home furnishings are starting to come down as well. The central bank has already raised its benchmark borrowing rate six times this year from near zero in March to just under 4% now. A report on Tuesday showed inflation dipped from an annual rate of 9% in June to just over 7% in November.

Fed to hike 50bps, focus on the terminal 'Dot Plots', will Powell lean back on easing financial conditions?

The desk highlights Core PCE could be revised up for 2022 to 4.6% from 4.5% and 2023 to 3.2% from 3.1%, but left unchanged for 2024 at 2.3% and revised lower for 2025 to 2.0% from 2.1%. GS highlights possibilities on how they could do this, including: "showing higher 2023 rates in the dot plot, Chair Powell suggesting that there could be more than one 50bp hike in his post-FOMC conference (we expect a 50bp increase at the meeting), or a material upward revision of the long run rate". Recession: With the ongoing tightening, the chances of a recession are becoming more likely. TD Securities provides a list of possible economic projections that the Fed could signal, and for PCE inflation they see it left unchanged in 2022 at 5.4%, slightly higher in 2023 to 2.9% from 2.8%, but unchanged for 2024 and 2025 at 2.3% and 2.0% respectively. However, with the Fed fighting the demand side of the equation, a strong labour market hampers the fight against inflation. Analysts at TD Securities expect the unemployment rate in the SEP forecasts to be revised slightly lower in 2022 to 3.7% from 3.8%, but higher in both 2023 and 2024 to 4.6% from 4.4%, and 2025 to 4.4% from 4.3%. Labour Market/Wages: The US labour market has been very resilient to the tightening of Fed policy and has not weakened as much as the Fed would have liked. The latest inflation expectations from the UoM consumer sentiment survey were encouraging, as the short-term 1yr projection saw a notable move lower to 4.6%, while 5yr expectations were left unchanged at 3%, a welcome sign for the Fed with the 1yr now at the lowest level since September 2021 and implying that hot inflation is not becoming embedded in longer-term inflation expectations. 3% implied probability of another 75bp increase in wake of the cool November CPI report, while recent Fed commentary (and minutes) has seen many officials express a desire to slow down the pace of rate hikes now we are approaching a "sufficiently restrictive level". There is also plenty of attention on the FFR peak forecast from the Fed's dot plots, which is currently expected between 4.75-5.00% early next year, in line with money market pricing, however, the Reuters survey found that one-third of economists expect rates to go higher. Powell & Co have suggested it is likely to be somewhat higher than what was pencilled in at the September SEPs (4.6% in 2023) and money markets are pricing in a rate of 4.86%, implying an FFR of 4.75-5.00%. It is likely that Powell will use his familiar line in the press conference to imply the forecasts are not concrete and can be subject to change, depending on the data.

After four straight three-quarter-point interest rate hikes, the Federal Reserve is set to announce a smaller half-point increase in its key rate Wednesday.

Worries have grown that the Fed is raising rates so much in its drive to curb inflation that it will trigger a recession next year. Wall Street investors are betting that the Fed will reverse course and start cutting rates before the end of next year. Britain’s inflation also eased from a 41-year record of 11.1 percent in October to a still-high 10.7 percent in November. The hikes have sent home sales plummeting and are starting to reduce rents on new apartments, a leading source of high inflation. The unemployment rate is envisioned to jump to 4.6 percent by the end of 2023, from 3.7 percent today. The policymakers also forecast that their key short-term rate will reach a range of 5 percent to 5.25 percent by the end of 2023. The Fed boosted its benchmark rate a half-point to a range of 4.25 percent to 4.5 percent, its highest level in 15 years. The national average for a gallon of regular gas, for example, has The year-over-year increase of 7.1 percent, though still high, was sharply below a recent peak of 9.1 percent in June. Fed officials will likely want to see further moderate inflation readings before they would be comfortable suspending their rate hikes. But the Fed announced a smaller hike than it had in its past four meetings at a time when inflation is “But it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

Infrastructure and roads are severely damaged, making relief efforts difficult. In Gauteng, emergency services remain on high alert as more rain is expected.

In Johannesburg roads and homes were swept away and in the Eastern Cape temporary road closures, power outages and damaged property. Manqoba Mchunu and Ronald Masinda bring us the details. Thousands affected by heavy rainfall across the country, and it's expected to continue for at least a few more days.

The Federal Reserve raised interest rates by half a percentage point on Wednesday and projected at least an additional 75 basis points of increases in ...

The key question is are consumers going to keep spending or will they soften that pace?” “That’s why they’re holding interest rates higher for longer and the market is acting they way it is. “The rate hike was not the story here, the story was the change in the SEP (Summary of Economic Projections) and you can see that in how the fed funds futures have changed. But viewed in the context of historical norms this is still a rapid pace of tightening and reinforces the FOMC’s statement that they are still “highly attentive” to inflation risks. That means they’re willing to tolerate more economic pain to get inflation down to where they think it should be.” “(The sell-off) It’s coming from summary of economic projection, that’s pressuring the equity market. The most dovish participants is looking for an extra 50 bps of hikes. They're reiterating their forecasts but the whisper number was that the Fed was going to stop at a 4.5%-4.75% terminal rate. “The most interesting part of the releases were in the Summary of Economic Projections. With the last two rate hikes we had the markets drop on the day it occurred and the following day.” Despite a lower-than-expected CPI inflation report yesterday, the Fed’s statement today signals that they are going to be even more restrictive than they had previously indicated.” central bank's cutting interest rates and ruled out any changes to the Fed's 2% inflation target.