After hovering around 40-year highs through the last year, inflation has eased substantially as the Federal Reserve aggressively raised interest rates and the economy showed signs of cooling. Consumer prices rose at an annual rate of 6.5% in December, down from a peak of 9.1% in June.
At the FOMC’s first meeting of 2023, the Federal Reserve raised interest rates by a quarter point, marking the smallest rate hike since March 2022. With several positive developments in recent weeks, Fed Chair Jerome Powell acknowledged that the ‘disinflationary process’ has started.
