Fed officials will likely engage in a fraught debate over whether it may soon be time to slow its rate hikes, which are intended to cool the worst inflation in four decades
At a news conference Wednesday after the Fed’s latest meeting, Chair Jerome Powell could signal a forthcoming shift to smaller rate increases. Doing so would give officials time to assess the impact of the hikes.
Yet some economists have said the Fed should soon consider scaling back the fastest pace of rate increases since the early 1980s. Fed watchers say there are two ways the central bank could avoid raising any misplaced optimism: Officials could send a tough anti-inflation message Wednesday by reiterating a point from the minutes of their September meeting. The minutes showed that the policy-makers preferred to err on the side of raising rates too high, rather than raising them too little and risk perpetuating high inflation.
“We need to see actual progress in core inflation and services inflation, and we are not seeing it yet,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said recently.
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