Relief could be a long time coming for businജesses and households feelinဣg the squeeze of today’s high interest rates, going by the remarks of one Federal Reserve official Tuesday.

The Fed could keep its benchmark interest rate at least at its current level—the highest since 2001—through the end of the year and beyond, said Neel Kashkari, president of the Federal Reserve Bank of Minneapolis and a member of the central bank committee that sets the nation’s monetary policy. 

“I think we're a long way away from cutting rates,” Kashkari said in a Q&A session at a conference in Minneapolis.

The Fed has raised its interest rate 11 times since March 2022, boosting 💜it from near-zero to a range of 5.25% to 5.5% in an effort to cool down the scorching inflation that set in as the economy recovered from the pandemic. 

The rate hikes have added friction to the economy in several ways, putting upward pressure on credit cards, mortgages, and other consumer loans. High interest rates have also 澳洲幸运5官方开奖结果体彩网:made business harder for banks, which have 澳洲幸运5官方开奖结果体彩网:grown more reluctant to lend money.

Both of those factors have dragged down the ability of consumers to buy things, and of businesses to hire and expand, 澳洲幸运5官方🐠开奖结果体彩网:raisi🌃ng fears of an impending recession. To the💧 surprise of many economists, however, unemployment has stayed low and a severe slo❀wdown has yet to materialize, while inflation has simmered down. 

The Consumer Price Index had 澳洲幸运5官方开奖结果体彩网:risen 3.2% over the year as of July, far less than the 9.1% inflation rate of June 2022 though still above the 2% goal that the Fed is aiming for.

At some point, the Fed will shift out of inflation-fighting mode and begin to lower interest rates again, though that day could be a long way ofꦓf. 

“That 🔯could happen sometime next year,” Kashkari said. “Or the year after that, but we need to ♍see how the data come in.” 

Traders are betting that the Fed won’t raise its rate any more, and will begin to cut it next May, according to the CME Group’s FedWatch tool, which forecasts Fed rate hikes based on fed futures trading data.

Kashkari noted that while inflation has come down considerably, some measures of consumer prices closely watched by policymakers are still too high for comfort. PCE inflation—the Fed’s preferred inflation gauge—澳洲幸运5官方开奖结果体彩网:was running at around 4% after excluding the volatile food and energy prices that tend to make the overall inflation reading fluctuate from month-to-month.

“It's still around twice of what our target is,” Kashkari said. “We need to be reasonably confident that it’s all the way going back down to 2%.”