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US Fed official says interest rates ’at, or near’ peak

BI Desk || BusinessInsider

Published: 17:22, 30 September 2023  
US Fed official says interest rates ’at, or near’ peak

Photo: Collected

US interest rates are rapidly approaching their highest level in the Federal Reserve's current battle against inflation, and may already be there, a senior Fed official said Friday.

The US central bank has raised interest rates 11 times since March 2022 in a bid to tame inflation and bring it firmly down to its long-term target of two percent reports BSS/AFP.

Although inflation has come down sharply in the last 12 months, it remains stuck stubbornly above the Fed's target, even increasing slightly over the summer, which has kept up the pressure.

"My current assessment is that we are at, or near, the peak level of the target range for the federal funds rate," New York Fed President John Williams said in a statement published Friday.

"I expect we will need to maintain a restrictive stance of monetary policy for some time to fully restore balance to demand and supply and bring inflation back to our 2 percent longer-run goal," he added.

Earlier Friday, the key US inflation measure used by the Fed to set interest rates ticked up again in August, fueled by rising energy prices.

But aside from volatile food and energy costs, which are still paining Americans at grocery stores and gas pumps, inflation actually slowed last month to reach its lowest annual rate since 2021.

Futures traders currently assign a probability of more than 80 percent that the Fed will hold rates steady at that decision on November 1, according to data from CME Group.