Last week, the Federal Reserve raised interest rates by 25 basis points (bps) at its first meeting of 2023, taking it to a target range of 4.5% to 4.75%. This move marks a slowdown from the 50-bps hike in December and a string of four 75-bps hikes from June through November last year.
Although the central bank acknowledged reduced inflation, it signaled a rate hike again in March. Fed Chair Jerome Powell said, “It would be very premature to declare victory or think that we really got this.” But he also added, “We can now say, I think for the first time, that the disinflationary process has started.” This indicates that the Fed is nearing the end of its hiking cycle.
