Wdw shift exchange7/11/2023 ![]() "It really does begin to weigh on the economy," Evans said. It also has been blunt: In comments this week in Virginia, Chicago Fed President Charles Evans warned of outsized "nonlinear" risks to the economy if the federal funds rate is lifted much beyond the 4.6% level officials projected in September that they would reach next year. That advice has been subtle: In a speech earlier this month, Fed Vice Chair Lael Brainard offered a list of reasons to be cautious about further tightening without overtly calling for a slowdown or pause. While the process of raising interest rates is not yet finished, policymakers feel they may be at the point where further increases can be smaller in size, and are close to where they can pause altogether in order to take stock as the economy adjusts to the rapid change in credit conditions the central bank has set in motion. Yet even as markets point to another large increase at the final policy meeting of the year in December, sentiment is building within the Fed to take a breather. ![]() Investors widely expect the Fed next month to raise its benchmark overnight interest rate by three-quarters of a percentage point for a fourth consecutive time, lifting it to a range of 3.75% to 4.00%. ![]() The time is now to start planning for stepping down." While acknowledging that high inflation made it "really challenging" for the central bank to step down from its rate hikes, Daly said "the time is now to start talking about stepping down. San Francisco Fed President Mary Daly added her voice to that debate on Friday during an event in Monterey, California. Louis Fed President James Bullard said in a Reuters interview last week. "This debate about exactly where we should go, and then become more data-dependent, is going to heat up in the last part of the year here," St. 1-2 policy meeting as officials weigh what some see as growing risks to economic growth against a lack of obvious progress in lowering inflation from its pandemic-related surge. central bank is likely to provide a signal at its Nov. WASHINGTON, Oct 21 (Reuters) - The Federal Reserve, set to approve another large interest rate increase early next month, is shifting to a debate over how much higher it can safely push borrowing costs and how and when to slow the pace of future increases.
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