The Globe and Mail reports in its Tuesday, Sept. 20, edition that Federal Reserve chairman Jerome Powell bluntly warned last month that the Fed's drive to curb inflation by aggressively raising interest rates would "bring some pain." An Associated Press dispatch to The Globe reports that on Wednesday, Americans may get a better sense of how much pain could be in store. The Fed is expected to raise its key short-term rate by a substantial three-quarters of a point for the third consecutive time. Another hike that large would lift its benchmark rate to a range of 3 per cent to 3.25 per cent, the highest level in 14 years. In a further sign of the Fed's deepening concern about inflation, it will also likely signal that it plans to raise rates much higher by year's end than it had forecast three months ago. Economists expect Fed officials to forecast that their key rate could go as high as 4 per cent by the end of this year. They are also likely to signal additional increases in 2023, perhaps to as high as roughly 4.5 per cent. Short-term rates at that level would make a recession likelier next year by sharply raising the cost of mortgages, car loans and business loans. Oxford Economics sees a "hard landing" ahead.
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