The Fed upped its estimate of what taming inflation will take
The Federal Reserve has left its policy rate at 5% to 5.25% to evaluate the impact of past monetary tightening. The median projection for the fed funds rates rose more than for projected inflation, suggesting the committee requires greater real rates to restrain the economy. Fed Chair Jerome Powell was reluctant to specify a level of rates that would be "sufficiently restrictive" during a press conference, but the Fed's Summary of Economic Projections indicates that policymakers believe "real rates" may need to be as much as 2% above inflation in 2024.
The Federal Reserve has left its policy rate at 5% to 5.25% to evaluate the impact of past monetary tightening. The median projection for the fed funds rates rose more than for projected inflation, suggesting the committee requires greater real rates to restrain the economy. Fed Chair Jerome Powell was reluctant to specify a level of rates that would be "sufficiently restrictive" during a press conference, but the Fed's Summary of Economic Projections indicates that policymakers believe "real rates" may need to be as much as 2% above inflation in 2024.