The Federal Reserve continued its pause on interest rate hikes in November.
It comes on the heels of strong economic growth and positive employment data.
Still, uncertainty going into 2024 suggests an interest rate cut won't happen anytime soon.
The nation's central bank just gave Americans some financial relief.
On Wednesday, the Federal Open Market Committee announced it would be holding interest rates steady in November as it continues its efforts to bring inflation down. This follows a pause in September, as well, and comes on the heels of promising economic data — inflation in September held steady from August at 3.7% year-over-year, the US added 336,000 jobs the same month, and GDP growth came in at a two-year high of 4.9% in the third quarter.
Federal Reserve Chair Jerome Powell indicated during the September press conference that the economy is moving toward the Fed's inflation target of 2%, and following ten consecutive interest rate hikes since March 2022, he said it makes sense for the central bank to slow down its aggressive inflation-fighting efforts.
"We need to get to a place where we're confident that we have a stance that will bring inflation down to 2% over time," Powell said. "That's what we need to get to, and we've been moving toward it. As we've gotten closer to it, we've slowed the pace at which we've moved."
The Fed's latest move, coupled with the economy's recovery, have also cast aside recession concerns for 2023. The White House's Council of Economic Advisors, for example, released a blog on Tuesday stating that "the US economy has proven to be consistently resilient."
"The American consumer, backed by a persistently tight labor market and recently rising real wages, is one salient force behind this economic resilience," it wrote.
Treasury Secretary Janet Yellen also said during a Bloomberg event last week that "you don't really see any sign of recession here."
"What we have looks like a soft landing with very good outcomes for the US economy," she said.
However, some prominent voices in finance have expressed skepticism on the economy's recovery going into next year. Goldman Sachs CEO David Solomon, for example, pointed to conflicts abroad that could make tightening "more evident and will create slowdowns in some areas."
"There has been an escalation of geopolitical stresses around the globe — the war in Ukraine, ongoing tensions with China and now the conflict in the Middle East," he said. "Overall levels of risk are more elevated than we've seen in quite some time."
Still, while the Federal Open Market Committee has remained cautiously optimistic about the direction the economy is moving toward, it doesn't anticipate interest rate cuts will happen anytime soon. Its meeting minutes from September stated that some participants felt it necessary to shift the conversation from "how high to raise the policy rate to how long to hold the policy rate at restrictive levels."
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