ANI
30 Jan 2023, 16:33 GMT+10
Washington [US], January 30 (ANI): Morgan Stanley expects US Federal Reserve to raise key policy rates by 25 basis points (a quarter of a percentage point) in its upcoming two-day monetary policy meeting.
The US monetary policy meeting is scheduled for January 31 and February 1.
"We forecast that the Fed will deliver a 25 bp hike this meeting, setting the interest rates upper bound at 4.75 per cent," Morgan Stanley said in a report titled 'What's Next in Global Macro'.
The US central bank's policy rate is now in a target range of 4.25-4.50 per cent, the highest level in 15 years, and notably, it was near zero in the early part of 2022.
It has for the fourth consecutive time hiked policy rates with 75 basis points magnitude. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline. However, in its latest meeting in December, it was raised by 50 basis points.
Coming to the inflation in the US, consumer inflation in the US moderated to 6.5 per cent in December from 7.1 per cent the previous month but still is way above the 2 per cent target. In October, it was reportedly 7.7 per cent.
Inflation has declined in the US in recent months but it will take time to come down to the two per cent target, Federal Reserve Vice Chair Lael Brainard said earlier this month at a business school event, adding that the central bank is determined to stay the course.
"Inflation has declined in recent months, which is important for American households, businesses, and consumers. Inflation is high, and it will take time and resolve to get it back down to 2 per cent. We are determined to stay the course," Brainard had said. (ANI)Get a daily dose of Africa Leader news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
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