By Wong Kon How
02 Nov 22 FOMC meeting, the Fed has decided on another massive rate hike of 0.75%. This will be the fourth 0.75% rate hike and sixth interest rate hike for the year, bringing the benchmark lending rate to 3.75-4.0 per cent, the highest since January 2008.
Following is the key takeaway from last night meeting:
· Another steep rate hike at 0.75% with more to come: “…not yet ready to halt their efforts.”
· "It's very premature in my view to be thinking about or talking about pausing our rate hike. We have a ways to go."
· Their goal of bringing inflation or CPI down to 2%, now at 8.3%
· Bringing inflation down is "likely to require below-trend growth," and that the window to achieve a soft landing - slowing inflation while avoiding a downturn - has narrowed
· Meaning recession is unavoidable, but softer landing is still possible
· The latest Fed’s sentiment is according to the behavioural science of inflation and interest rate developments