NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss believes that the 25 basis point rate hike by the Federal Reserve Wednesday likely isn't the last one.
"Wall Street saying, it's got to be the last one, pushes the Fed to actually counter that and not be the last one," Goss said. "Today's rate hike is a quarter percent. I expect one more in March. That's the next meeting of the Federal Reserve."
Inflation is starting to cool and is actually settling down better than Goss thought it would, but the matching of wits between an all growth is good Wall Street and a growth tapering Fed continues.
"It is a tug of war," Goss said. "It's absolutely that. If you listen to the press conferences, Jay Powell expresses that. That's what we're seeing. This tug of war, we will see it end and I think it's going to end in March. Then we're going to see the unemployment rate begin to rise."
Increased unemployment on a macro scale may actually be a sign of successful application of interest rate hikes, according to Goss.
"We're going to see that play out in 2023 with higher interest rates," Goss said. "Even with the higher interest rates, it's still going to be, again, a soft landing. It's not back where we need to be, but it's better than what we thought could have happened."
The Fed is still looking at rate hikes until wage growth starts to slow, especially in the service and healthcare sectors.