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Fed New York President John Williams Says Interest Rates Need to Go Up to 4.5%

Despite the interest rates surging from near zero to 3% to 3.25% from March, the Fed still intends to remain aggressive in attempts to fight inflation. According to Federal Reserve New York President John Williams, the interest rates need to get up to at least 4.5% in order to put an end to rising prices.

Speaking recently at the University of Buffalo, Williams explained that further interest rate hikes need to happen but that the way the economy performs will dictate when and how that happens.

“The timing of that and how high do we have to raise interest rates is going to depend on the data,” Williams said. “Right now the focus is getting inflation back down to 2%.”

During his speech, Williams acknowledged that Fed’s decisions have consequences not just on the domestic market but also on the international market. However, he reiterated that the Federal Reserve is currently only focused on bringing the stability of prices in the U.S.

The most recent interest rates hike came during the Federal Reserve’s meeting in late September. Many experts believe the rates will be increased again at a November meeting for at least 75 basis points. It is predicted that the rates will go up to 4.4% before 2022 wraps up with another 20 basis points hike next year.

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