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The only hikes to worry about (for now) are the ones in this week’s NFL games.
The Fed voted unanimously to keep interest rates steady in its meeting on Wednesday, holding them at 5.25%–5.5%. It also kept rates unchanged during its last meeting, in September. That makes this the longest stretch without a hike since the Fed started raising rates in March 2022.
Chair Jerome Powell acknowledged the “strong pace” of the US economy during his remarks, mentioning the “outsized” GDP growth of 4.9% in the third quarter. He also cited increased consumer spending, the tight labor market, and the effect of high interest rates on mortgages as factors the Fed paid attention to when making its decision. The agency “may have underestimated the balance sheet strength of households and small businesses,” he said during a press conference.
The stock market surged following the news that rates weren’t going anywhere. The Dow Jones went up 212 points, CNBC reported, and the S&P and Nasdaq also rose.
The Fed meets once more this year, on Dec. 12–13. Powell noted that another rate hike could be a possibility at that meeting. “The idea that” it would be “difficult to raise again after stopping for a meeting or two, it’s just not right,” he said.
But his remarks suggested that the Fed was willing to wait and see what effect its previous rate hikes had before approving another increase. “The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” he said.
Some analysts predict the Fed’s hiking spree is over. “The fact that they left rates unchanged for the second time in a row suggests the Fed might leave rates unchanged in December,” Peter Cardillo, chief market economist at Spartan Capital Securities, told Reuters. “And if they do, that means the Fed is done.”