The Federal Reserve is widely expected to hold interest rates steady this Wednesday during the central bank’s last policy meeting of the year.
It is also expected to caution against making rate cuts anytime soon, defying the expectations of some on Wall Street who expect that easing to happen as early as March.
Market observers are eager for any sign that the most aggressive rate-hiking campaign since the 1980s is over.
“Raising the Fed funds rate is off the table,” Wilmer Stith, bond portfolio manager for Wilmington Trust, said. “The issue is how long are we going to be at 5%?”
Luke Tilley, chief economist at Wilmington Trust, predicts the Fed will hint it may have reached the peak on rate hikes.
“I expect there will be some couched language that says we’ve reached a level of restrictiveness and continuing to turn towards the question of how high for how long,” he said.
The Fed last hiked rates in July and has elected to keep interest rates unchanged the past two policy meetings in a range of 5.25%-5.50%, a 22-year high.
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