Fed Signals 2 More Rate Hikes Through 2027 as Unemployment Holds at 4.2%
Updated
Updated · The New York Times · Nov 6
Fed Signals 2 More Rate Hikes Through 2027 as Unemployment Holds at 4.2%
3 articles · Updated · The New York Times · Nov 6
Summary
December is shaping up as the Fed’s next likely move, with policymakers now settled on a gradual path that also points to at least one additional rate increase in 2027.
A 4.2% unemployment rate and subdued wage growth have kept the labor market from feeding inflation, letting officials focus on price pressures rather than job-market overheating.
Inflation has stayed above the Fed’s 2% target for nearly six years, driven mainly by an Iran-war energy shock and heavy AI-related corporate spending.
Kevin Warsh said tighter financial conditions from falling stocks and shifting bond yields were moving in the right direction, but not yet tight enough to derail the gradual approach.
A sharper acceleration in prices—especially if labor costs start driving it—would be the main trigger for the Fed to abandon gradualism and raise rates more aggressively.