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New Federal Reserve rate hike for November how much?

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As it battles inflation that remains at a four-decade high, the Federal Reserve is expected to raise its key interest rate by another 0.75% on Wednesday.

The Federal Open Market Committee met Tuesday to determine the latest rate hike; is expected to be announced on Wednesday afternoon. This interest, known as the federal fund rate, affects the cost of borrowing and the rate of investment throughout the economy. Since March, the Fed’s rate hike has helped make borrowing and investing more expensive, aiming to slow the economy and moderate price increases.

The interest rate hikes have taken place this year against the background of a consumer price index that has remained high. In September, it was 8.2% year-on-year. Food and energy price increases were higher. Even stripped of those two items, whose price swings tend to be more volatile, the index saw its biggest rise since 1982.

The rate hike would be the Fed’s sixth straight run this year, a cycle not seen since the inflation-fighting days of the early 1980s. The central bank has been plagued by persistently high inflation rates, while other factors that had influenced price increases, such as higher gas and energy prices, have cooled down.

As a result, some experts believe that the Fed should continue to raise interest rates, even if it pushes up unemployment. The Fed’s dual mandate dictates that it must balance inflation and employment. Writing in The Washington Post this weekFormer US Treasury Secretary Larry Summers called on Fed Chair Jerome Powell to take an aggressive stance on rate hikes, even if it causes job losses in the short term.

Summers predicted that the unemployment rate would have to rise above 4.4% to bring inflation under control. The unemployment rate in the US currently stands at 3.5%.

“For more than a decade, from 1966 to 1979, policymakers have failed to do what it takes to contain inflation as they shrink from the immediate effects of restrictive policies,” Summers wrote. “History doesn’t remember them well.”

But debate is ongoing as to whether the Fed’s stance is now too aggressive, given other signs of weakening the economy. That includes fastest-ever slowdown in house price growth while mortgage rates rise to over 7% – the highest in 20 years.

Other interest rates, such as those on auto loans and credit cards, are the highest in more than a decade, meaning higher auto payments and higher interest charges if you have a balance on your credit card. Another measure of inflation, personal consumer spending, has been delayed in the past three monthswhen volatile food and energy prices are excluded.

“We doubt Chairman Powell’s tone will change significantly this week, but he won’t be able to stem the tide if the numbers turn,” Ian Shepherdson, Pantheon Macroeconomics’ chief economist, wrote in a note to customers Monday.

He said market observers will be keenly focused on Friday’s salary report, which will show whether average hourly wages are still growing. Wages have risen along with inflation, but not enough to keep up with price increases. The median hourly wage in the US is now $32.46 in September, compared to $28.09 in September 2019. While workers enjoy higher salaries, the extra money is being swallowed up by higher prices for goods and services.

“The Fed will not pause — let alone consider easing — as long as wage growth remains much faster than in line with its inflation target,” Shepherdson wrote.

Other economic experts say inflation is steering the ship.

“Despite a rapidly cooling housing market, inflation is showing no signs of abating, the labor market is still strong and the economy is resilient,” Greg McBride, chief financial analyst at Bankrate, said in a statement. “This forces the Fed to continue its aggressive approach to interest rates.”

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