Fed plans to cut rate hikes in December

The U.S. Federal Reserve is expected to cut the pace of interest rate increases as early as the end of the year. On Thursday, it was reported that the economic slowdown has already taken place. According to the reports, it was provoked by the Fed's actions. 

The U.S. economic growth was able to return to its previous indicators in the third quarter, but this data could easily be refuted by a report from the U.S. Department of Commerce. The report said that consumer spending declined from 2% to 1.4% compared to the previous quarter. While the GDP deflator, which reflects price pressures, fell from 9.1% to 4.1% compared to the previous quarter. 

Peter Cardillo, an economist at Spartan Capital Securities, believes that the slowdown in consumer spending shows how much the rise in interest rates is affecting consumers' wallets.

On the one hand, the actions of Fed officials show that they intend to continue to fight inflation by raising interest rates, as the inflation target of 2% hasn’t been reached. On the other hand, it can be assumed that once interest rates are raised high enough and inflation falls to an acceptable level, growth will slow down. However, in order to avoid repeated sharp jumps, officials won’t be able to cease rate increases completely.

As Richard Moody of Regions Financial Corporation notes, the full effect of high interest rates haы yet to be seen, but the outlook is bleak. Instability can already be seen in the real estate market due to high mortgage interest rates, and consumer spending could soon be cut in half.