Fed officials remained worried that inflation could stop cooling, minutes show
CNN
Federal Reserve officials continued to worry about the risk that inflation’s slowdown could stall during their policy meeting last month, minutes released Wednesday showed. That could keep interest rates at 23-year high for longer than previously expected, affecting Americans’ borrowing costs on everything from car loans to mortgages.
Federal Reserve officials continued to worry that inflation could stay stubbornly high during their policy meeting last month, minutes released Wednesday showed. That could keep interest rates at 23-year high for longer than previously expected, affecting Americans’ borrowing costs on everything from car loans to mortgages. The Fed in January opted to hold rates steady for the fourth consecutive meeting and officials acknowledged that inflation has slowed considerably from its four-decade peak in the summer of 2022. But Fed Chair Jerome Powell pushed back on the market’s expectation that the first rate cut could come in the spring, saying that it’s way too soon to declare victory. Stocks ended lower last week, breaking a five-week streak of gains as hot inflation gauges raised fears among investors that the central bank may cut rates later and less aggressively than previously expected. The first measure of inflation for 2024, the Consumer Price Index, showed that prices rose by 3.1% for the 12 months ended in January, according to Bureau of Labor Statistics data. That marks a step back from December’s 3.4% rate and a dramatic cooling from the 6.4% increase seen in January 2023. Fed officials frequently say they want to see data stretching over several months before they make interest rate decisions. It’s possible that the hot January inflation data could be just a one-month event. The minutes said that Fed staff economists “continued to view the uncertainty around the baseline projection as elevated but noted that this uncertainty had diminished substantially over the past year.”
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