The US Federal Reserve suggests lowering the pace of interest rate hikes

Federal Reserve Vice President Lyle Brainard said the central bank may soon slow the pace of interest rate hikes.

With markets anticipating a possible decline in December due to the rapid pace of interest rate hikes by the Fed questyear, Brainard pointed out that a slowdown, if not a halt, was looming.

Brainard added in an interview with Bloomberg: “I think it will be appropriate in the very near future will move to a slower rate of price increases, “according to what Al Arabiya

This does not mean that the US Federal Reserve will stop raising interest rates, but at least it will outstrip the pace of four consecutive 0.75 percentage point hikes, an unprecedented pattern since the central bank began using interest rates at short term to set monetary policy in 1990.

“I think what really needs to be emphasized is that we have done a lot, but we have more work to do in terms of raising interest rates and maintaining moderation to bring inflation to 2% over time, “Brainard said.

Brainard’s comments come after the Federal Reserve recently raised its benchmark interest rate to a target range 3.75% -4%, the highest level in the last 14 years.

The US Federal Reserve has been battling inflation at its highest level since the early 1980s and has continued at an annualized pace of 7.7% in October, according to the Bureau of Labor Statistics.

The US consumer price index rose 0.4% last month, less than the Dow Jones estimate of 0.6%.

Brainard said he saw signs of falling inflation.

“We raised interest rates very quickly,” he said. “We have reduced the budget and you can see it in the financial conditions, you can see it in the inflation expectations, which are well anchored.”

In addition to raising interest rates, the Fed cut bond holdings on its balance sheet to a maximum rate of $ 95 billion per month.

Since that process, called “quantitative tightening,” began in June, the Fed’s balance sheet has shrunk by more than $ 235 billion, but remained at $ 8.73 trillion.

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