The minutes from the Late FOMC Meeting (Minutes), Highlights:
– The Fed continues to fight inflation and expects higher interest rates to remain in place until more progress is made
– Rate cuts should not happen in 2023, further rate hikes are needed now
– Given the persistent and unacceptably high level of inflation, several FOMC members noted that historical experience cautions against premature and unwarranted easing of monetary policy
– Inflation may be more resilient than it may seem
– Inflation is still seen as a key threat, but bilateral risks still need to be balanced.
– The minutes note that officials are grappling with two risks: first, that the Fed is not keeping rates high enough and allowing inflation to remain high, as it did in the 1970s; and second, that the Fed is spending too long on restrictive policies and slowing the economy too much, potentially placing the greatest burden on the most vulnerable
– Powell indicated that while some progress has been made in fighting inflation, he sees only some signs of stopping and expects rates to remain at higher levels even after prices stop rising.
Full article: https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20221214.pdf