Why Higher Fed Rates Are Not Totally Off the Table

Investors believe that the Federal Reserve will not raise interest rates again anytime soon. While officials have indicated that further rate increases are unlikely, recent commentary from the Fed Chair reveals that it is not completely ruled out. The central bank decided to keep rates steady at 5.3 percent and Powell, when asked about the possibility of future rate hikes, did not fully dismiss the idea. He also avoided directly answering questions about whether rates were high enough to control inflation. This suggests that if inflation were to rise, policymakers might consider raising rates. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, expressed concern about inflation remaining at its current level and hinted at the possibility of future rate increases.