Source: Reuters —
WASHINGTON, Oct 21 (Reuters) – The Federal Reserve, set to approve another large interest rate increase early next month, is shifting to a debate over how much higher it can safely push borrowing costs and how and when to slow the pace of future increases.
The U.S. central bank is likely to provide a signal at its Nov. 1-2 policy meeting as officials weigh what some see as growing risks to economic growth against a lack of obvious progress in lowering inflation from its pandemic-related surge.
“This debate about exactly where we should go, and then become more data-dependent, is going to heat up in the last part of the year here,” St. Louis Fed President James Bullard said in a Reuters interview last week.
San Francisco Fed President Mary Daly added her voice to that debate on Friday during an event in Monterey, California. While acknowledging that high inflation made it “really challenging” for the central bank to step down from its rate hikes, Daly said “the time is now to start talking about stepping down. The time is now to start planning for stepping down.”
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