The Australian’s Washington Correspondent Adam Creighton says the US economy is in a strange position after US Federal Reserve Chairman Jerome Powell signalled interest rates may need to rise further this year.
The rates decision comes at a critical time for US President Joe Biden, who has been dealing with an automotive workers strike, rising petrol prices and a low approval rating. “We learnt from the meeting this week that most of the voting members think that rates will probably be higher and possibly one more increase this year,” Mr Creighton told Sky News Business Reporter Edward Boyd.
“That’s very bad news for President Biden because we’re going into the 2024 election year and the administration will certainly be hoping that rates fall during that period. “The current forecast is for just one or two cuts next year which given the 5.5 per cent level that they’re currently at would still leave rates very high.”