Fed officials remain hawkish on inflation despite recessionary fears

Minutes released

The Federal Reserve expects higher interest rates to remain in place for “some time,” as it continues to see inflation as the major threat to the American economy, despite increasing fears over a potential recession.

The minutes of last month's Fed meeting, released yesterday (4 January), revealed that central bank officials felt they need to see "substantially more evidence" of inflationary decline before pulling back on monetary tightening. At a meeting where policymakers raised their key interest rate another half percentage point following the news that inflation remained high at 7.1%, Fed officials emphasised "the need to retain flexibility and optionality" on future monetary policy. After the meeting on 15 December, Fed chair Jerome Powell indicated that while some progress had been made aga...