Fed's fight against inflation is weighing on middle-class Americans
Cresset Capital CIO and founding partner Jack Ablin discusses higher interest rates and offers his market outlook on 'Barron's Roundtable.'
Americans are more worried about the state of the U.S. economy than they were one year ago, despite the resilient job market, slowing inflation and an unexpected surge in growth during the third quarter.
The spike in pessimism largely stems from fears over the Federal Reserve's aggressive interest rate hike campaign, which has pushed borrowing costs to the highest level since 2001, according to a new Harris Poll conducted for Bloomberg News.
The survey found that 57% of middle-class Americans think higher interest rates are having a negative effect on their household finances. On top of that, about 44% said they were stressed about the economy – up from 40% one year ago and 39% in March.
FED'S POWELL WARNS SLOWER ECONOMIC GROWTH MAY BE NEEDED TO COOL HIGH INFLATION
Fed officials voted at their September meeting to hold interest rates steady at a range of 5.25% to 5.5%. However, policymakers also left the door open to an additional increase this year – and indicated they will hold rates at peak levels for longer than previously expected.
A pedestrian passes the Marriner S. Eccles Federal Reserve building in Washington, D.C., on June 3, 2023. (Photographer: Nathan Howard/Bloomberg / Getty Images)
The Fed is scheduled to meet two more times this year, in November and December. Investors widely agree the central bank will hold rates steady at the upcoming November meeting, according to the CME Group's FedWatch tool, which tracks trading.
However, some traders expect that the Fed will approve a 12th rate increase in December following the blowout GDP report last week, which showed the
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