Powell tees up slower December hike, but says still way to go until peak rates By

By Yasin Ebrahim

-- Federal Reserve Chairman Jerome Powell said Wednesday that the pace of rate hikes is cfdslikely to slow, but the peak level of rates will be higher than previously expected as there is a long way to go to curb above-trend inflation.

"Moderating the pace of rate increases may come as soon as the December meeting," Powell said on Wednesday at the Brookings Institution event in Washington. He added that the monetary policy was approaching "the level of restraint that will be sufficient to bring inflation down." 

The Fed chairman, however, pushed back against market bets for a sooner rather than later pause on , saying that the peak level of rates, or the terminal rate, will need to be “somewhat higher than thought at the time of the September meeting and Summary of Economic Projections."

About 70% of traders expect the Fed to slow rate hikes to 50 basis point in December, down from 75 basis points seen in the prior four Fed meetings.

“We continue to expect the FOMC to slow the pace of rate hikes to 50bp in December and to 25bp in February, March, and May, raising the funds rate to a peak of 5-5.25%,” Goldman Sachs said in a note ahead of Powell’s remarks.”

The latest core personal consumption expenditures price index, the Fed’s preferred gauge of inflation, at 5% remains well above the Fed’s 2%. Recent data showing signs of the easing price pressures has inc

The Fed has taken aim at the labor market in its fight against inflation, hoping that tighter monetary policy measures will help cool demand by enough to keep a lid on wage growth, and ultimately inflation. 

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