Fed interest rate hikes are likely over, with Fed announcing its latest decision Wednesday
USA TodayDec 03, 2023
The Facts
The US Federal Reserve (Fed) on Wednesday announced for the third straight time that it wouldn't be changing its key short-term interest rate from its 22-year high of 5.25% to 5.5%.
In addition, the central bank suggested there could be three rate cuts next year, reducing the rate by three-quarters of a percent. Fed Chair Jerome Powell said in a press conference that “the appropriate level will be 4.6% at the end of 2024.”
The Spin
Democratic narrative
The economic recovery from the COVID era is nearing the finish line and we can see the light at the end of the tunnel. Inflation, jobs, wages, and consumer spending data are all doing so well, even the deliberate Powell has been moved to hold rates steady and forecast potential decreases. The markets reacted well to the news and it looks like the US, under Pres. Joe Biden, is headed toward a great 2024.
Republican narrative
The Biden administration and the Fed can spin these numbers in their favor, but they shouldn’t ignore that Americans have faced more than two years of negative real wages because inflation has outpaced wage growth. Americans’ spending power has been decimated and their debt has skyrocketed because of the inflation brought on by Democrats’ big spending. We can’t trust the current regime to truly get the economy rolling.
