According to minutes of its latest meeting released Wednesday, no Federal Reserve (Fed) official expects a rate cut in 2023 amid much longer-than-expected inflation.
“None of the participants believe that it is appropriate to start cutting interest rates in 2023,” the minutes of the 13-14 meeting said. December.
On the other hand, they expect “continuous rate hikes” and believe that they will undoubtedly be “adequate to meet the target”, ie bringing inflation back to around 2%.
Their rhythm will have to be based on the development of consumer prices, because the measures taken by the Fed, which has been raising interest rates since March, need time to take full effect, they say.
“Participants generally noted that until data suggest inflation is on a sustained downward path of 2%, which should take some time, tightening policies should be maintained,” the report continues.
Some Fed officials also pointed out that “historical experience warns against a premature easing of monetary policy”.
Economic forecasts released by the Fed after the meeting showed that Fed officials are now planning to raise interest rates above 5.00% after peaking at 4.6 in previous forecasts released in September % had seen.
Rates had been hiked half a point to 4.25-4.50% at the mid-December meeting, the highest level since 2007.
That sharp rise, however, marked a slowdown from previous meetings, when the Fed Committee resorted to three-quarter point hikes for the first time since 1994.