![]() "Participants generally indicated that upside risks to the inflation outlook remained a key factor shaping the outlook for policy," the minutes said. However, members said they see the risks more weighted to easing too soon and allowing inflation to run rampant. The minutes noted that officials are wrestling with two-pronged policy risks: One, that the Fed doesn't keep rates high long enough and allows inflation to fester, similar to the experience in the 1970s and two, that the Fed keeps restrictive policy in place too long and slows the economy too much, "potentially placing the largest burdens on the most vulnerable groups of the population." Fed officials, however, have expressed doubt repeatedly about any loosening of policy in 2023. 1, according to CME Group data.Ĭurrent pricing also indicates the possibility of a small reduction in rates by the end of the year, with the funds rate landing around a range of 4.5%-4.75%. Traders expect the central bank to approve a quarter-point increase at the next meeting, which concludes Feb. Markets currently are pricing in the likelihood of rate increases totaling 0.5-0.75 percentage point before pausing to evaluate the impact the hikes are having on the economy. The minutes reflected those sentiments, noting that no FOMC members expect rate cuts in 2023, despite market pricing. "A number of participants emphasized that it would be important to clearly communicate that a slowing in the pace of rate increases was not an indication of any weakening of the Committee's resolve to achieve its price-stability goal or a judgment that inflation was already on a persistent downward path," the minutes said.įollowing the meeting, Fed Chairman Jerome Powell indicated that while there has been some progress made in the battle against inflation, he saw only halting signs and expects rates to hold at higher levels even after the increases cease. ![]() Officials further cautioned that the public shouldn't read too much into the rate-setting Federal Open Market Committee's move to step down the pace of increases. Officials also said they would focus on data as they move forward and see "the need to retain flexibility and optionality" regarding policy. The increase ended a streak of four consecutive three-quarter point rate hikes, while taking the target range for the benchmark fed funds rate to 4.25%-4.5%, its highest level in 15 years. "In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against prematurely loosening monetary policy." "Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time," the meeting summary stated. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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