Federal Open Market Committee members were unanimous in their decision to hold interest rates steady at 5.25 to 5.5% at the December 12-13 meeting, and that doing so would promote further progress toward the committee’s 2% inflation target, according to minutes released today. FOMC members “viewed the policy rate as likely at or near its peak for this tightening cycle,” according to the minutes, citing a decline in inflation and signs that supply and demand are coming into better balance.
Though members “generally perceived a high degree of uncertainty surrounding the economic outlook,” they noted that “clear progress had been made in 2023 toward the committee’s 2% inflation objective.” Members remained concerned, however, that “elevated inflation continued to harm households, especially those with limited means to absorb higher prices.”
Looking ahead to 2024, “almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024.”
