“Fed set to slow pace of rate hikes as inflation Grinch loses steam”

“The Federal Reserve will conclude its last policy meeting of the year on Wednesday on the back of a surprise drop in inflation, consensus around a slowed pace of interest rate increases, and markets primed for a coming halt in the monetary tightening.

Fed officials signaled in recent weeks that they would raise the U.S. central bank’s benchmark overnight interest rate by half a percentage point at their two-day meeting this week, scaling back from four straight three-quarters-of-a-percentage-point increases, in an acknowledgement that rates were approaching the level needed to slow the economy and lower inflation…

The November inflation data, which showed consumer prices rising less than expected for a second straight month, “increases the likelihood that we could get a dovish surprise” from new policymaker projections showing rates rising only another half percentage point by the end of 2023, Krishna Guha, vice chair of Evercore ISI, wrote ahead of the policy decision. Guha, however, said he still expects Fed policymakers’ median rate projection to narrowly favor a higher endpoint in a range from 5% to 5.25%…”

https://finance.yahoo.com/news/fed-set-slow-pace-rate-111505122.html