Fed Minutes: Inflation risks remain high for 'some time'

　　China News Agency, New York, January 4th. According to the minutes of the December 2022 monetary policy meeting released by the US Federal Reserve Board on the 4th, participants generally believed that the current inflation is still unacceptably high, and there is a high degree of uncertainty in the inflation outlook. , the Fed will maintain a restrictive policy stance, including keeping interest rates high for "some time."

　　On December 14 last year, the Federal Reserve announced a 50 basis point rate hike after its regular monetary policy meeting, raising the target range of the federal funds rate to between 4.25% and 4.5%.

The interest rate hike has attracted widespread attention because it ended the Fed's momentum of raising interest rates by 75 basis points for four consecutive times.

　　The minutes warned that investors should not read too much into the Fed's move to slow the pace of rate hikes.

Some officials emphasized that "slowing down the pace of rate hikes does not mean that the Fed's determination to achieve its price stability goal has weakened, nor does it mean that inflation is on a sustained downward trajectory."

　　The minutes showed that none of the participants expected rate cuts starting in 2023 to be the appropriate course of action.

Officials generally agreed that there are many factors related to the economic outlook, that inflation risks remain tilted to the upside, and that price pressures could be more persistent than expected.

Therefore, a restrictive policy stance needs to be maintained until subsequent data provide confidence that inflation is on a steady decline.

　　Fed officials forecast the median federal funds rate to rise to 5.1% by the end of 2023, according to a dot plot of the rate hike path released in December last year, suggesting an additional 75 basis points of rate hikes this year.

The minutes of the meeting gave little hint as to whether the next rate hike was more likely to be 25 basis points or 50 basis points, saying only that the Fed would make a decision at each of its regular monetary policy meetings.

　　Regarding the possibility of an economic recession, the minutes of the meeting pointed out that the real economic activity in the United States is expected to have downside risks compared with the baseline forecast in 2023, and an economic recession sometime this year will be a "plausible alternative."

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