Lael Brainard, vice president of the US Federal Reserve, listens to a question during an interview in Washington, DC, US, on Monday, November 14, 2022.
Andrew Harrer | Bloomberg | beautiful pictures
Federal Reserve Vice Chairman Lael Brainard indicated on Monday that the central bank could soon slow down the pace of rate hikes.
With markets expecting the Fed to cut rates in December due to the Fed’s rapid pace of rate hikes this year, Brainard confirms that a slowdown if not a halt is looming.
“I think it might soon be appropriate to transition to a slower rate of rate hike,” she told Bloomberg News in a live interview.
That doesn’t mean the Fed will stop raising rates, but it will at least reach the pace that has seen four consecutive 0.75 percentage point increases, a pattern not seen since the bank The central bank began using short-term interest rates to set monetary policy in 1990.
“I think it’s really important to emphasize that we’ve done a lot, but we have a lot more work to do both in terms of raising rates and maintaining restraint to bring inflation down to 2% over time,” Brainard said. speak.
Brainard spoke a week after Fed takes base rate to the target range of 3.75%-4%, a 14-year high. According to the Bureau of Labor Statistics, the Fed battled inflation at its highest level since the early 1980s and continued at 7.7% annually in October.
The Consumer price index rose 0.4% Last month, it was 0.6 percent below the Dow Jones estimate, and Brainard said she has seen signs that inflation is cooling.
“We’ve raised rates very quickly… and we’ve reduced our balance sheet, and you can see that in financial terms, you can see that in inflation expectations, which are held. pretty stable,” she said.
Along with raising interest rates, the Fed has reduced its bond holdings on its balance sheet at a maximum rate of $95 billion a month. Since this process, nicknamed “quantitative tightening,” began in June, the Fed’s balance sheet has fallen by more than $235 billion but remains at $8.73 trillion.
