Fed minutes released: Interest rates to stay higher for a while

The Fed has released the minutes of the Federal Open Market Committee (FOMC) meeting held on December 13-14, 2022.

Minutes from the last meeting, in which the policy rate was raised by 50 basis points to a 15-year high of 4.25-4.50 percent, indicated that the Fed will keep interest rates at higher levels. high for a while.

In the minutes, which emphasized the importance of pursuing a tight monetary policy while inflation was “unacceptably high,” members noted that “in general, a tight policy stance should be maintained until incoming data provide confidence that inflation is in a constant downward trend. On my way to 2 percent, that’s some “. I’ll get it” time. expression was used.

The minutes noted that Fed officials reiterated their firm commitment to bring inflation back to its 2 percent target.

IN 2023, THE INTEREST REDUCTION IS NOT PROJECTED TO BE ADEQUATE

Emphasizing the importance of clearly communicating that a slowdown in interest rate increases is not an indication of weakening in the Committee’s determination to achieve its objective of price stability, the minutes stated: “No member anticipated that it would be appropriate to begin reduce the federal funds rate target range in 2023”. the evaluation was done.

“Given the persistent and unacceptably high level of inflation, several members commented that historical experience cautions against premature loosening of monetary policy,” the minutes read. statement was included.

In the minutes, committee members stated that upside risks to the overall inflation outlook remain an important factor determining the policy outlook. evaluation was included. (AA)