easy56 schreef op 4 januari 2023 20:21:
None of the 19 top Federal Reserve officials expect it will be appropriate to cut interest rates this year, according to the minutes of the central bank’s December policy meeting released Wednesday.
Fed officials welcomed recent inflation data that showed reductions in the monthly pace of price increases, but wanted to see a lot more evidence of progress to be convinced inflation was on a sustained downward path, the minutes said.
Investors who trade in the fed funds futures market expect the Fed to start reducing interest rates this summer.
Fed officials said that if markets start to ease financial conditions, especially if driven by a misperception of how the Fed was responding to the data that “would complicate” the FOMC’s effort to restore price stability.
Officials downshifted to a 50 basis point rate increase at the Dec. 13-14 meeting, after four straight 75 basis points moves. That puts their benchmark rate in a range between 4.25% to 4.5%. A number of Fed officials said it was important to stress that raising rates at a slower pace was not a sign of any “weakening” in the Fed’s resolve to bring inflation down to 2% or a judgement that inflation was already on a downward path.
Seventeen of 19 Fed officials said they expected rates to rise above 5% this year. Officials penciled in the high end of the interest rate range will hit 5.25% with seven officials penciling in even higher rates.
This is well above market based measures of Fed policy rate expectations.
Earlier on Wednesday. Minneapolis Fed President Neel Kashkari said he would like to see the Fed hike interest rates to 5.4% before pausing.
Read: Fed’s Kashkari backs more rate hikes at next few meetings
Investors see the high end of the Fed’s interest rate range hitting 5.25% this summer and then retreating.