The December consumer price index (CPI) increased 6.5% year-over-year and decreased 0.1% over the prior month. This raised consumer confidence, signaling that the Fed’s rate hikes are having the intended effect.
However, the central bank has given indications of continuing hikes at a slower pace until inflation falls below 2%. Recently, Fed Governor Michelle Bowman commented, “In recent months, we’ve seen a decline in some measures of inflation but we have a lot more work to do, so I expect the FOMC will continue raising interest rates to tighten monetary policy, as we stated after our December meeting.”
