July 24, 2024
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UBS: The Fed May Raise the Last Interest Rate Above 5% Because Wages are Going Up.

(Yonhap Infomax = Seoul) Reporter Kim Ji-yeon = As of late, the US job market seems to be doing well, so it’s possible that the Federal Reserve System (Fed) will raise the final interest rate more than the 5% that the market expects. A picture formed.

Interest rates in the US are between 3.75 and 4.0 percent right now, and the market thinks that the Fed will raise them to 5% next year.

Business Insider reported on the 6th that Mark Haefele, CIO of UBS, said in a report, “The data that came out last week show that the job market is strong.” “That’s way too much.”

Higher wage growth means that consumers have more money to spend, which means that they can spend more.

The US Consumer Price Index (CPI) for October was 7.7%, which is higher than the Fed’s inflation target of 2%.

“Inflation seems to have reached its peak and is going down, but it will be hard for the Fed to reach its 2% inflation target because wage growth is strong,” said CIO Haefele.

But UBS thinks that the Fed will raise rates by 50 basis points at its meeting this month.

At each of its four Federal Open Market Committee (FOMC) meetings this year, the Fed has raised interest rates by 75 basis points. The Fed will meet again on the 13th and 14th.

Before, nonfarm payrolls in the US went up by 263,000 in November, which was more than the 200,000 increase that analysts had expected.