The Federal Reserve announced on Wednesday that no cuts can be expected in 2023, and instead, more rate hikes are on their way. After a year of waning housing affordability driven by steady interest rate gains and historically high home prices, the latest announcement confirms that a post-pandemic market correction is far from over.
Overall inflation hit a 41-year high of 9.1% in June, but Fed officials aren’t convinced that prolonged inflation has finally peaked. As a precaution, the Fed plans to move full speed ahead with ongoing increases in 2023, Forbes reports.
The Fed’s next interest rate announcement is slated for February 1. Bond investors expect a top rate of 4.94%, but economists at Goldman Sachs expect the Fed will deliver quarter-point hikes at their next three meetings—holding top interest rates at 5.25%, the highest level since 2007, for the rest of the year. Incoming inflation data, however, could lower—or raise—these forecasts.
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