Fed to slow rate hike after 75 bps hike on Nov. 2

Analysts, according to a Reuters poll, believe that until inflation is halved, the U.S. Federal Reserve System should continue to raise interest rates. Thus, the Fed will raise interest rates by 75 basis points for the fourth time in a row on Nov. 2.

According to the forecasts of the polled analysts, at least one more increase is inevitable. However, it’s likely to be only by 50 basis points, which may indicate a decrease in the rate of interest rate growth. Thus, the funds rate could reach 4.25-4.5% by the end of this year. The analysts' forecast coincides with the Fed's median projection. 

For now, Fed officials are analyzing the impact of rate hikes on the economy and summarizing the results. Probably, the pace of increase will decrease soon.

According to Brett Ryan, senior U.S. economist at Deutsche Bank, the pace of hikes will only slow once Fed’s officials see that rate hikes have an attractive outcome. He also noted that the Fed’s plans to curb inflation with further tightening, which is likely to lead to a recession in the third quarter of 2023, growth will become negative, and the unemployment rate will increase significantly.