Central Bank Isn’t Backing Down—More Rate Hikes Ahead in 2023
The Federal Reserve is gearing up for another aggressive year of rate hikes meant to slow inflation, and while economists are optimistic, homebuyers are losing steam
Jan. 5, 2023
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The Federal Reserve announced on Wednesday that no cuts can be expected in 2023, and instead, more rate hikes are on their way. After a year of waning housing affordability driven by steady interest rate gains and historically high home prices, the latest announcement confirms that a post-pandemic market correction is far from over.
Overall inflation hit a 41-year high of 9.1% in June, but Fed officials aren’t convinced that prolonged inflation has finally peaked. As a precaution, the Fed plans to move full speed ahead with ongoing increases in 2023, Forbes reports.
The Fed’s next interest rate announcement is slated for February 1. Bond investors expect a top rate of 4.94%, but economists at Goldman Sachs expect the Fed will deliver quarter-point hikes at their next three meetings—holding top interest rates at 5.25%, the highest level since 2007, for the rest of the year. Incoming inflation data, however, could lower—or raise—these forecasts.
