WASHINGTON (AP) — After four straight three-quarter-point interest rate hikes, the Federal Reserve is set to announce a smaller half-point increase in its key rate Wednesday, a first step toward dialing back its efforts to combat inflation.
At the same time, the Fed is expected to signal that it plans more hikes next year than it had previously forecast to try to conquer the worst inflation bout in four decades. And most economists think Chair Jerome Powell will stress that the Fed will likely keep its benchmark rate at its high point through next year, even after the hikes have ended.
Well, okay. In Powell I trust. Inflation is always such a bitch to tackle. Raise rates not enough and it continues; raise them too much and you stifle business, hiring, and throw the economy into recession. Inflation has eased the last five months. I might have thought that would be enough evidence maybe to pause the hikes at the current level and see what the next month or two bring but inflation is still too high and I do understand the impulse. I'm more concerned with the resolve to keep raising them in 2023 and to set them at the highest plateau when the hikes end.
