At the meeting, many of the attendees said they had raised their assessments of the path of interest rate increases that would likely be necessary to achieve the committee’s goals.
However, some of them agreed that it would be important to “calibrate” the pace of further tightening of monetary policy in order to mitigate the risk of significant adverse effects on the economic outlook.
At last month’s meeting, Fed officials raised interest rates by three-quarters of a percentage point for the third time in a row as they seek to cut inflation from 40-year highs. Fed Chairman Jerome Powell later promised that “they will continue until we are sure the job is done.”
Fed policymakers have remained united in their comments on the urgent need to tackle inflation, that they fear it risks becoming entrenched, even if its aggressive rate tightening comes at the cost of higher unemployment.
The last few weeks have marked a turning point for the financial markets, that for much of the year they had clung to the conviction that the Fed would quickly backtrack next year and cut rates in the face of slowing growth and rising unemployment.
Fed representatives have openly closed to that expectation, saying that they expect to leave the high rates for some time after they have finished raising them.
Source: Ambito
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