Americans may get a better sense of how much pain could be in store.
FILE - A for sale sign is posted in front of a home in Sacramento, Calif., Thursday, March 3, 2022. The Federal reserve is expected at its meeting this week to raise its key interest rate by a substantial three-quarters of a point for the third consecutive time. Another hike that large would lift its benchmark rate which affects many consumer and business loans to a range of 3% to 3.25%, the highest level in 14 years.
. The Fed intends those higher borrowing costs to slow growth by cooling off a still-robust job market to cap wage growth and other inflation pressures. Yet the risk is growing that the Fed may weaken the economy so much as to cause a downturn that would produce job losses. The inflation report also documented just how broadly inflation has spread through the economy, complicating the the Fed's anti-inflation efforts. Inflation now appearsand less by the supply shortages that had bedeviled the economy during the pandemic recession.
“He’s not going to say that," Bostjancic said. But, referring to the most recent Fed meeting in July, when Powell raised hopes for an eventual pullback on rate hikes, she added:"He also wants to make sure that the markets don’t come away and rally. That’s what happened last time.”
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