Unfortunately, the main thing that could change that and bring rates lower is a U.S. The two-day meeting is scheduled to start. Even so, the Fed is currently committed to high rates for 2023, so even if rates aren’t increased after March, the Fed may leave rates high for most of 2023. With the next FOMC meeting just a week away, its time for another Fed summary with a preview of what to expect. However, that would require continued favorable news about falling inflation and perhaps some cooling of the jobs market. Markets see a reasonable chance that March represents the final hike of this interest-rate-cycle for the Fed. Economists widely expect Federal Reserve monetary-policy makers to approve a fourth straight jumbo interest-rate rise at its meeting this week. 2023 is currently expected to be different, markets expect a few smaller hikes earlier in the year, but rates could then hold steady for much of 2023, or even fall. Later meetings of 2022 saw repeated and large interest rate hikes. Paramount among them will be the consumer price index reading. 20-21 Federal Open Market Committee meeting.
This data is unlikely to shift the Fed’s position for February, but could change the trajectory for interest rates for the March and May meetings. Fed officials will be closely watching the remaining big data points before the Sept. For example, CPI inflation for December 2022, will be announced on January 12, and unemployment for December will be announced on January 6. A rate hike in February does seem likely based on the Fed’s recent statements, however inflation reports for the month of December will be released in January and will inform the Fed’s view. The Federal Reserve is widely expected to raise interest rates by a half of a percentage point for the second consecutive time at the end of its next meeting on June 15.
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