15 Stocks to Buy as ‘Hawkish’ Fed Keeps Door Open for Future Hikes
The Federal Reserve left its benchmark interest rate unchanged for the second straight meeting and kept the door open to another rate hike this year as the central bank’s ongoing battle against inflation appears to be far from over.
FOMC officials unanimously voted to hold the target range for the federal funds rate at 5.25%-to-5.50% at the conclusion of Wednesday’s policy meeting.
By skipping a rate hike in November, Powell and other top Fed officials hope to use the extra time to further assess how higher rates have affected inflation and the economy.
«Economic activity expanded at a strong pace in the third quarter,» the Fed’s post-meeting statement said, marking an upgrade to the «solid pace» of activity the Fed saw as of its September meeting.
The Fed's statement added that with job gains still «strong» and inflation still «elevated,» the central bank continues to consider «the extent of additional policy firming that may be appropriate to return inflation to 2% over time.»
Looking ahead, policymakers said they still see one more 25 basis point rate hike before the end of this year, with the Fed funds target rate peaking in the 5.50%-5.75% range.
Despite the Fed’s hawkish tone, many investors believe that the U.S. central bank is unlikely to raise rates any further, bringing an end to its most aggressive tightening cycle in decades.
Traders now see a 70% chance of the Fed leaving rates at current levels in December, according to the Investing.com Fed Rate Monitor Tool. Meanwhile, financial markets are pricing in a small chance of a rate cut as early as the Fed's June 2024 meeting, with odds currently at about 50%.
While that is possibly true, it’s not a guarantee by any stretch and the market could be in for a rude
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