Fed is about to slow down pace of rate hiking, though rate cut is not expected

As it was said by U.S. Federal Reserve Chair Jerome Powell, there will be likely no sharp tightening in the nearest future. According to his words, the Fed’s policy is already "pretty aggressive" in terms of rate hiking. In this regard, further dramatic increases that might be harmful for the economy won’t be delivered just in order to tame inflation.

In his speech at the Brookings Institute, Powell expressed the view that it is possible to eliminate inflation, but at a high cost. According to his estimates, a period that required quick moves is over, and now it’s time for a slowdown and a sober assessment of the situation. As it was underlined by Powell, high uncertainty is still prevailing.

Powell also spoke in favor of a "risk management" approach in relation to rate hikes. Moreover, he emphasized that it’s not weakening that is needed, but a careful and slow search for the right level of restrictive policy.

As it was concluded by Powell, the Federal Reserve doesn’t aim at cutting rates in the nearest future.