Fed's Powell says job strength shows inflation fight may last 'quite a bit of time'
ReutersFeb 07, 2023Feb 07, 2023
As the January jobs report seemed to surprise Fed officials and investors alike, the Fed's next move should probably be aimed at hiking rates a little bit more. As of December, inflation was still twice the target rate, and unless some drastic increase occurs before the next meeting, raising the benchmark to 5.25% or more will likely be what's needed.
Despite the current official outlook, the US could see Fed rate cuts this year rather than hikes or pauses. Though it didn't show in the January report, all it will take is one month of negative job growth on top of the weakening economy. This is a real possibility given the already —declining economy as well as the recent massive layoffs, particularly in the tech sector.