Ahead of the Federal Open Market Committee (FOMC) announcement on the monetary policy and the subsequent Jerome Powell speech, former President of the Federal Reserve Bank of Atlanta Dennis Lockhart predicted that the US Federal Reserve would eventually go for a transition by the end of the year 2023.
Lockhart added that the Fed will be cautious when it comes to relaxing the monetary policy as the inflation target is yet to play out on the target path. The central bank officials have been maintaining that there will not be any change to the 2% inflation target.
According to the CME FedWatch Tool, respondents state that there is a 28.9% likelihood that the central bank will raise the Federal target rate at the November 1, 2023 FOMC meeting.
In the following meeting on December 13, 2023, the respondents registered a 35.4% likelihood of rate hike from the current target rate of 525-550 bps.