Is the Federal Reserve nearing the end of its rate-hiking cycle? The U.S. central bank is giving investors mixed messages. The Fed has recently paused its rate hikes and said it would keep interest rates between 5.25% and 5.5%.
However, Fed Chair Jerome Powell said at a press conference that another rate hike isn’t off the table. “We’re not confident that we haven’t, we’re not confident that we have” reached that sufficiently restrictive plateau, Powell said. “Inflation has been coming down, but it’s still running well above our 2% target.”
“A few months of good data are only the beginning of what it will take to build confidence,” he added.
What Wall Street Is Saying
So, what does Wall Street think? Ultimately, some industry insiders seem unconcerned. Reuters is reporting that “BofA Global Research no longer expects the U.S. Federal Reserve to raise interest rates.”
“We now think that the hiking cycle is over,” wrote BofA economists led by Stephen Juneau. BofA added that the Fed may “try to leave the door open for more hikes next year.” However, “there are diminishing returns to hawkish rhetoric when its policy choices lean dovish.”