US Federal Reserve officials indicated on Friday that a steady, gradual increase in interest rates would be a better strategy to deal with inflation that has reached a 40-year peak in the US. There was speculation in the market that the US Fed would increase interest rates very aggressively to deal with inflation, but recent statements from Fed officials have put an end to the fears of the market that the US Fed will increase interest rates. Will adopt a very aggressive strategy on rates.
John Williams, President of the New York Federal Reserve Bank, told reporters that it is unlikely that the Fed will make any sudden big increases in interest rates at the very beginning. Significantly, John Williams ranks number 2 in the policy setting panel of the US central bank. He further said in his statement that the US Fed will increase interest rates gradually in a phased manner and will review after each increase.
US Fed Governor Lael Brainard has said that it is likely that the Fed will increase rates in a series. It will start with the Fed meeting to be held in March. Along with this, the Fed’s balance sheet will also see a gradual cut in the coming meetings.
Speaking at a conference in New York, Brainard did not give specifics about the upcoming meeting, but he did say that the recent changes in the financial market, including the increase in mortgage rates, have been in line with the Fed’s estimates.
With the tightening of the US Fed and the tension between Russia-Ukraine, will gold prices continue to rise, know what is the opinion of experts
It is worth noting that last week investors who invested in federal funds futures contracts believed that the US Fed could increase its rates by up to 0.50 percent in the meeting to be held in March, but now it is being estimated that In the meeting, the US Fed can increase interest rates by 0.25 percent and this whole year can see 6 increases in rates.
Similarly, in this conference held in New York, Chicago Fed President Charles Evans denied that the Fed needs to be too aggressive to control inflation. He said that inflation will come down on its own gradually.
It is worth noting that the US Fed Jerome Powell has been silent from speaking on these issues since January. In such a situation, the market is keeping an eye on the comments of Williams and Brainard to guess the policies of the Fed.
,