Although the inflation showed signs of easing in October and November 2022, the Fed increased its benchmark interest rate to a range of 4.25% to 4.5% at its December meeting. Furthermore, policymakers anticipate that interest rates will stay high for longer and might reach 5.1% this year. However, the easing of inflation in December might make the Fed rethink its policy stance this year.
Investors are paying close attention to inflation since it impacts how far the central banks would go on their rate-hiking path. Rate increases have caused the economy to slow down, and how far the Fed chooses to go could determine whether or not there would be a recession.
