Fed meeting

For equity investors sunk in gloom, the interest rate rise expected from the Federal Reserve on Wednesday may actually yield some relief.

Economic outlook: Part of this week's meeting will see Fed officials issue a quarterly update of their interest rate and economic outlook. While the Summary of ...

There's a corresponding scenario where inflation stays stubbornly high and the Fed has to keep raising, which he said is "a very bad alternative down the road." Household net worth fell more than 4% in the second quarter to $143.8 trillion, due largely to a decline in the valuation of stock market holdings, [according to Fed data](https://www.federalreserve.gov/releases/z1/20220909/z1.pdf) released earlier in September. "If inflation is really stubborn and stays high, they may just have to grit their teeth and have a recession that lasts for a while," said Bill English, a professor at the Yale School of Management and former senior Fed economist. In recent days, both Morgan Stanley and Goldman Sachs conceded that the Fed may have to raise rates into 2023 to bring down prices. "The consequences of not fighting inflation are greater than the consequences of fighting it. While individual names are not attached to projections, it will be interesting to see whether the new members are on board with the direction of Fed policy. [Jerome Powell](https://www.cnbc.com/jay-powell/) will hold his usual news conference following the conclusion of the two-day meeting. In June, the committee put the terminal rate at 3.8%; it's likely to be at least half a percentage point higher following this week's meeting. Economic outlook: Part of this week's meeting will see Fed officials issue a quarterly update of their interest rate and economic outlook. Rates: In its continuing quest to tackle runaway inflation, the Fed likely will approve a 0.75 percentage point hike that will take its benchmark rate up to a target range of 3%-3.25%. New kids on the block: One slight wrinkle at this meeting is the input of three relatively new members: Governor Michael S. That's the highest the fed funds rate has been since early 2008.

The Federal Reserve is expected to deliver a third straight supersize interest rate increase at 2 p.m. on Wednesday as it tries to wrestle stubborn inflation ...

If they show a bigger down-drift this time, it will be a signal that they think a more aggressive hit to the economy will be needed to wrestle inflation lower. In June, for instance, officials didn’t see it happening through 2024, signaling that the path toward more subdued inflation is likely to be a long one. In the Fed’s last set of projections, officials saw unemployment rising to 4.1 percent in 2024. Powell, the Fed chair, has already acknowledged that the adjustment process is likely to bring “pain” to businesses and households. But once the job market slows, joblessness begins to rise and wage growth moderates — a series of events officials think is necessary to get back to slow and steady price gains — the really difficult phase of the Fed’s maneuvering will begin. In June, half of officials expected rates to peak between 3.75 and 4 percent or higher at the end of 2023. But investors expect that the central bank could project an even higher rate by the end of the year — so they will also be parsing the Fed’s first set of economic projections since June for a sense of what comes next. The White House will be paying close attention to the Fed’s outlook for future interest rate increases. Car loans are also expected to climb, but those increases continue to be overshadowed by the rising cost of buying a vehicle and the price you pay for filling it with gas. Investors will parse the economic projections to better understand where the Fed is headed, and will then tune in to watch Jerome H. With fewer consumers and companies competing for the available supply of goods and services, price gains are able to moderate. Central bankers have already raised interest rates considerably in an attempt to slow the economy and temper price increases.

The Federal Reserve will probably announce another 0.75% interest-rate increase. More important is when the Fed will stop this tightening cycle.

Leading up to the August CPI report earlier this month, many on Wall Street had expected the Fed to slow its pace in September, raising rates by a half point. - Order Reprints - BREAKING

Full coverage of the Fed's September meeting and the markets. Sep 21, 2022 at 1:55 pm ET. Share.

government.\n\nIn a statement following the Fed's 0.75 percentage point rate hike, the Committee for a Responsible Federal Budget said "that if interest rates are 75 basis points higher than projections over the next decade, deficits will be $2.1 trillion larger." \n\nFed officials have long argued they do not think about government borrowing costs when setting monetary policy.