DWS: Commentary on the Fed's last interest rate hike
DWS: Commentary on the Fed's last interest rate hike
Christian Scherrmann, US Economist at DWS, comments on the Fed's last interest rate hike.
'As we expected, the Fed raised interest rates by another 25 basis points despite the lingering uncertainties surrounding financial stability. At the same time, central bankers indicated that the rate-hike cycle might soon come to an end. The statement now tells that “some additional policy firming” instead of “ongoing increases” may be appropriate. Central bankers also did not increase their median expectations on the terminal rate in 2023 but indicated to keep rates a bit higher thereafter. Overall, it seems like past headwinds from financial conditions eventually turned to tailwinds. How supportive these tailwinds will be, however, remains uncertain for the time being.'