Know The Difference Minute

Dot plots, or the Fed’s best guess, show policymakers expect to end interest rate hikes in 2023 peaking at 5.1%--higher than previously indicated.

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News from the Fed.
Welcome to the Know the Difference Minute for Wednesday, December 14th.
Today’s 50 basis-point increase in the Federal funds rate puts interest rates in the 4.25 to 4.5% range and in restrictive territory. Jerome Powell said rates won’t be cut until inflation falls to 2% "in a sustained way."
Dot plots, or the Fed’s best guess, show policymakers expect to end interest rate hikes in 2023 peaking at 5.1%--higher than previously indicated.
The Fed expects economic growth will slow sharply next year with unemployment climbing to 4.6%. In fact, it expects the jobless rate to remain higher than today in 2024 and 2025.
The real question: does the Fed raising short term rates enough solve a structural unemployment problem—one where immigration policy, demographics, and transfer payments along with fiscal challenges work in opposition to bringing down inflation?
I’m Dave Spano from Annex Wealth Management. That is your Know the Difference Minute.