What will the interest rates go in 2023?

It is possible that interest rates will not drop anytime soon. The Federal Reserve hiked rates CBC News reported that December’s range of 4.25%- 4.5% was increased by half a percentage point. It is done to combat inflation. in 2023.

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According to the Bureau of Labor Statistics, inflation is at 7.1% in November 2022. However, the Fed pointed out that the current benchmark rate does not suffice to suppress wage growth and price rise.

CBC News noted that out of 19 Federal Reserve officials on the monetary policy committee, 17 said the Fed’s target interest rates would have to rise above 5% in 2023. This would mean that the interest rates that borrowers would have pay would be higher. This could lead to U.S. prime rates exceeding 7% by 2023.

The Fed hopes that it can reduce inflation without having to do so. pushing the economy into a recession. ABC News reported in November that Fed Chair Jerome Powell claimed that he sees an opportunity for a soft landing. This would result in a rapid slowdown of inflation and not a significant increase in unemployment.

Powell responded to a question during a press conference, “A soft landing is no longer possible.”

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“No, I wouldn’t say that. No, I don’t say that,” Powell said during a press conference, as reported by CNBC. “To the extent we need to keep rates higher and keep them there for longer inflation […] That narrows the runway and lowers inflation, I believe. if they persist in time, could certainly make it more possible.”

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