Recession is still looming and the Fed rate hike cycle is nearing its end

Former Treasury Secretary Lawrence Summers has long predicted that a recession would be necessary to bring U.S. inflation down to the Fed's 2% target. In November 2022, he even thought the Fed might need to raise rates above 6% in order to control inflation.

But his latest forecast is that the Fed is now nearing the end of its job of raising interest rates to curb inflation.

"It is too early to consider a pause, but we are getting closer to that day," he told reporters on Friday.

But Mr. Summers also emphasized that he did not think policymakers would have to make a definitive decision beyond February.

Interest rate futures prices suggest the market expects the Fed to raise rates by 25 basis points at its next meeting. The Fed raised rates by 50 basis points last month after four consecutive hikes of 75 basis points, and a 25 basis point move at its next meeting would be a further slowdown in the pace of rate hikes.

The world is being affected by the Federal Reserve's interest rate hike, and every move will send tremors through the foreign trade industry.

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