The US Federal Reserve has indicated that they are easing the pace of its proposed rate hikes in the coming months. During recent Fed review Chairman Jerome Powell has maintained rate at 2-2.5%, saying that the labour market has continued to strengthen, and that economic activity has been rising at a strong rate while inflation remains near its 2 percent target. In addition, Fed reaffirmed its plans to continue raising rates gradually, indicating a rate hike at its next meeting in December.
The Fed had previously provided a guidance that the Fed Funds Rate was targeted to reach 2.5 percent by December 2018, 3.0 percent by 2019, and 3.5 percent by 2020. That would test the fiscal and monetary strength of emerging markets.
On Oct. 3, Powell said the Fed is “a long way” from getting rates to neutral.
On Nov. 28, he said rates were “just below” the range of estimates of neutral.
According to Fed estimates the neutral rate to be in the range of 2.5-3.5%. The current rate is 2.00-2.25%.
This year’s graph representation of Fed rates