The Federal Reserve has been steadily increasing interest rates to draw money out of the economy and ease inflationary pressures. Inflation slowed down in December 2022 to an annual rate of 6.5% and is expected to tick down to 6.2% in January, continuing the disinflation trend that began last summer.
However, inflation remains significantly higher than the Federal Reserve’s 2% target rate, threatening to tip the economy into a recession. Moreover, top economist Mohamed El-Erian recently warned that inflation has a 75% chance of rebounding or remaining elevated.
