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Even when we drop more than a full point in inflation, down to 2.97%, we are still not at the Federal Reserve’s 2% goal quite yet, but why not give it a little time to get there without Powell’s Silver Hammer? More pain for home buyers and the mortgage industry. So is the Fed done raising rates? Jerome Powell’s announcement to the US stated many things including the following:

  • Continuing to reduce securities holdings
  • Consumer spending has slowed since earlier in the year
  • Job growth is still strong
  • Getting back to 2% has a long way to go
  • Haven’t made any decisions about any future meetings
  • Estimated an additional two rate hikes at the last meeting
  • If data suggests more hikes, that will be the judgment we’ll make
  • Need to see inflation “durably down”
  • Do not believe policy has been restrictive enough
  • Inflation has proven more resilient than expected
  • Rate cuts likely not happening this year
  • Fed no longer forecasting a recession
  • The banking sector has stabilized

Few feel as I do, but there are a choice few who feel now that we have dropped below 3% the Federal Reserve should have been done. Perhaps, now that we have close to two months before the next Fed decision, the next CPI reports prior to that meeting will bring us down to the 2% that the Fed wants, and the rate hikes will cease. Perhaps not.

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