Finance & economics | Inflation

The Fed delivers another jumbo rate rise, and it’s far from done

There is a good chance it will keep rates high for longer than investors expect

Federal Reserve Board Chairman Jerome Powell holds a news conference following a closed two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., November 2, 2022. REUTERS/Elizabeth Frantz
|Washington, DC

As recently as the start of June investors and analysts believed that a “jumbo” interest-rate rise for the Federal Reserve meant half a percentage point. How quaint. After four straight increases of three-quarters of a percentage point—the latest on November 2nd—perceptions have changed. Indeed, a stockmarket rally in the two weeks before the announcement was rooted in the belief that the Fed may scale down to a half-point rate increase at its next meeting in December. What was once jumbo is now moderate.

This article appeared in the Finance & economics section of the print edition under the headline “Faster, higher, longer”

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