Stocks struggle after Fed eases rate hikes

Greg McBride, chief financial analyst at Bankrate, said the pace of Fed rate hikes may be slowing, but the central bank “still has a tough job ahead” as it tries to bring inflation down with minimal economic pain.

“Despite lackluster economic growth in 2023, the Fed believes they can raise interest rates above 5% without unemployment above 5%. Optimistic? Every football coach said on Friday that they would win that weekend – despite the We know half of them they’re going to lose,” McBride said in a statement.

Given historically low unemployment and decades of high inflation, it would be easy — and necessary — for the Fed to take aggressive steps in 2022, McBride noted.

By 2023, the path will become more challenging, he added.

“Once the economy is slowing, unemployment is rising and inflation is high, it will be much harder to raise rates,” he said. “Happy New Year, Mr. Powell!”

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