The Federal Reserve (Fed) released the minutes from the 13-14 December 2022 policy meeting where they raised rates 0.5 percentage points. The minutes acknowledged that inflation has eased in recent months. Still the Fed is concerned that high wage growth could ultimately prevent inflation falling back to the Fed’s 2% goal.
The Fed worries that risks to inflation are “skewed to the upside” and wanted to underline that “ongoing increases in the target range for the federal funds rate would be appropriate.” Declining rates are not on the Fed’s agenda any time soon. Specifically, “no participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023.”
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