The Fed is about to deliver another significant rate hike

There is a high possibility that the U.S. Federal Reserve System (the Fed) will raise interest rates for the fourth time in a row. Another increase is planned for the next month, with the rate increasing by 75 basis points. The Fed’s report presented on Friday showed that an aggressive growth of rates this year hasn’t been much help to cool down the country’s labor market.

At the same time, high interest rates have noticeably influenced the red-hot housing market, which for the first two years of the pandemic had a lack of supply that led to an increase in prices by more than 40%. But when mortgages rates rose to almost 7%, property sales slowed down, as well as the growth of prices itself.

Another report released early last week demonstrated that after the Fed and other central banks’ interest rate hike, the number of available vacancies on the labor market decreased sharply in August, while the price volatility in the global equity market increased, therefore, giving some hope that the Fed would soon slow down or even stop further rate hikes.

However, Fed policymakers constantly reject such claims, highlighting the fact that measures taken for reducing inflation will meet certain difficulties, and the inflation-taming task is far from its completion. The Friday’s report confirmed this Fed’s position.

Shawn Cruz, head trading strategist at TD Ameritrade in Chicago, noted that the Fed shows its intention to continue hiking rates quite clearly, and many delude either themselves or others by waiting another actions from the regulator.