The Fed will raise rates to 5% to get a grip on inflation, Deutsche Bank says

MarketInsider/Jennifer Sor/9-16-2022

photograph of FOMC participants March meeting

“The Federal Reserve will have to raise its policy rate to 5% in order to get a grip on high inflation, according to Deutsche Bank. That defies any hope for a policy pivot in the near future.”

USAGOLD note: A couple quick observations…… if the inflation rate stays above 8% or goes higher, a 5% fed funds rate will not be enough to contain inflation. A policy pivot does not necessarily have to be the product of inflation being contained. It could be forced by a breakdown in the credit markets, as was the case in 2019, or a rapid meltdown in the stock market. The Fed meets mid-week with the interest rate decision and a press conference scheduled for Wednesday.

Share
This entry was posted in Today's top gold news and opinion. Bookmark the permalink.