scheduled to be reduced Federal Reserve officials (US Central Bank) The pace of raising interest rates once more next week amid signs of slowing inflation, while the jobs report next Friday may show a steady demand for workers, which improves the chances of a soft landing for the largest economy in the world.
Policymakers are preparing to raise the benchmark federal interest rate by a quarter of a percentage point on Wednesday, to a range of 4.5% to 4.75%, for the second time in a row.
This step follows a series of recent statements indicating the success of the Fed’s aggressive campaign to slow inflation, according to Bloomberg, which was seen by Al Arabiya.net.
“I expect that we will raise interest rates several more times this year, although in my opinion, the days of 75 basis point increases are certainly over,” Philadelphia Fed President Patrick Harker said in a speech on Jan. 20.
“Increases of 25 basis points would be appropriate going forward,” he added.
Fed officials have made it clear that they also want to see evidence that the imbalances of supply and demand in the labor market are beginning to improve.
Employment may have slowed in January, according to economists polled by Bloomberg, who expected employers to add 185,000 jobs compared to 223,000 in December. Economists also see the unemployment rate rising to 3.6%, still close to a 5-decade low, and they see average hourly earnings rising 4.3% from a year ago, a slowdown from the previous month, according to their median estimate.
The Fed will get another important reading on inflation on Tuesday when the Labor Department releases its Employment Cost Index, a broad measure of wages and benefits. Job openings figures for December are also due on Wednesday, as well as a January survey of manufacturers.
Bloomberg Economics economists Anna Wong, Elisa Winger and Neeraj Shah wrote: “The Fed faces a conundrum: On the one hand, inflation data came out weaker than expected, and activity indicators showed slowing momentum over the past month; on the other hand, financial conditions softened.” Traders believe the Fed will soon turn to rate cuts. The data will justify a smaller rate hike, but the Fed is likely to see easier financial conditions – while inflation remains uncomfortably above target – as a reason to act hawkishly.”
Interest rate meeting schedule
Elsewhere, the Fed, European Central Bank and Bank of England are all likely to raise interest rates by half a point. The day following Eurozone data, Eurozone data is likely to show a slowdown in inflation and a stagnation in the economy. Meanwhile, surveys from China may reveal an improvement, the Central Bank of Brazil may keep borrowing costs unchanged, and the International Monetary Fund will publish its latest World Economic Outlook.
The world is looking forward to an important week in terms of interest rates, which will be monitored widely in Europe, the United States, Saudi Arabia, Brazil and Egypt.