A senior Fed official stated Friday that interest rates in the United States are swiftly approaching if not already at, their highest level in the Federal Reserve’s ongoing battle against inflation.
Since March 2022, the US central bank has raised interest rates 11 times in an effort to contain inflation and bring it back down to its long-term target of two percent.
Although inflation has fallen dramatically in the last 12 months, it remains stuck persistently over the Fed’s target, even growing slightly over the summer, adding to the pressure.
In a statement, New York Fed President, John Williams stated, “My current assessment is that we are at, or near, the peak level of the target range for the federal funds rate”.
“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”, Williams continued.
Earlier Friday, the key US inflation index used by the Fed to decide interest rates rose again in August, pushed by rising energy prices.
Aside from unpredictable food and energy costs, which continue to hurt Americans at grocery stores and gas pumps, inflation actually fell last month to its lowest annual pace since 2021.
According to CME Group data, futures traders currently assign a likelihood of more than 80 percent that the Fed will keep rates unchanged at its November 1 meeting.
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