As inflation rates soared to a peak of 9.1% in 2022, the Federal Reserve embarked on a challenging journey to bring them down. The first half of this year, however, proved to be a bumpy ride, underscoring the Fed's need for patience.
According to experts, inflation started to decrease in 2022 and 2023 without significantly impacting employment or the US consumer. The Fed's decision to raise interest rates in July last year seemed to be effective in curbing inflation while supporting the economy.
Despite initial progress, a series of unexpected spikes in inflation occurred in early 2023, prompting Fed officials to acknowledge a lack of advancement towards the 2% inflation target during their April 30-May 1 policy meeting.
This challenging period led to recent relief for Americans as bond yields decreased in anticipation of potential rate cuts by the Fed. Factors such as weaker-than-expected employment data and cooling inflation contributed to this shift, resulting in a significant drop in mortgage rates, which are now more than 1.5% lower than their peak last fall.
