(Finance) – The Fed expects a “mild recession” later in 2023. This is what emerges from the minutes of the US central bank meeting of 21 and 22 Marchwhich reveal that the decision to raise rates by 0.25% last month was unanimous.
Fed officials agreed that inflation is at unacceptably high levels and noted that recent data indicated slower-than-expected progress on disinflation.
According to the central bankers, “sustained disinflation would still require some easing of labor market restrictions and slowdowns in the growth of nominal wages”.
There are “few signs that pressures are abating at a sufficient pace to return inflation to 2% over time” – the document underlines -. Against this backdrop, “the rate hike by 25 basis points was decided unanimously” and it was also “agreed to continue the process of reducing the size of the balance sheet”.
The document also reiterates that it was agreed that “some additional policy tightening might be appropriate to achieve a sufficiently restrictive line to bring inflation back” to the 2% target. A clear signal that perhaps the peak in interest rates is now near, but it is not said that there will be a pause in the short term.