Is the tide turning for interest rates?

November 20, 2023
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Is the tide turning for interest rates?

The policymakers at the Federal Reserve, European Central Bank, and Bank of England have been on a relentless spree of increasing interest rates for the past couple of years. As a result, borrowing #costs in Europe and the US have reached their highest levels since before the financial crisis.

In the US, these aggressive rate hikes have successfully tamed #consumer price inflation, which currently stands at a modest 3.7 percent, significantly lower than the peak of nearly 10 percent. However, the Federal Reserve is still grappling with an unexpectedly buoyant economy, with a staggering annualized growth rate of 4.9 percent in the latest quarter.

Despite the rising prices and dwindling savings, consumer spending has not yet experienced a significant slowdown. This can be largely attributed to a resilient job market, although a recent jobs report for October fell short of expectations, indicating some potential moderation in the future.

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