ORLANDO, Fla. – The Federal Reserve last week raised interest rates for the ninth time in the last year as it works to tame lingering inflation and slow down the economy.
The decision took the benchmark federal funds rate to a target range between 4.75-5% — the highest it’s been since September 2007 — making it harder and more expensive to borrow money.
Earlier this month, Fed Chairman Jerome Powell indicated the central bank may have to take a more aggressive path to get inflation down to its goal of 2%, but experts say the numerous failures in the banking sector thwarted any notion of a more hawkish move.
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The “Stock Doctor” Lee Siler joined anchor Justin Warmoth on “The Weekly” to offer insight and perspective on what’s expected to be a long and bumpy ride to achieve the Fed’s goal.
“I think it’s a very lofty goal,” Siler said. “You still have things the Fed wants to control. We’re still at 3.6% unemployment and we still have wage inflation, which I don’t see going away. You see headlines all day long about companies raising salaries, so that’s not going to happen.”
While prices have come down in some sectors of the economy, Siler said what’s driving inflation today is the cost for rent and housing. It generally takes six to 12 months or even longer for changes in shelter costs to show up in inflation data.
“It’s only been one year since the Fed started raising rates,” Siler said. “Sometime in the next few months, once these rate hikes get cycled into the system and people renew their leases, I don’t think they’re going to raise the rates as quickly as they used to.”
Siler also discussed the growing possibility of the economy entering a deeper recession this year and what impact that could have on both Wall Street and Main Street.
Watch the full interview in the video player above.
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