Seventh Rate Hike of 2022 is the
Smallest Since May, Fed Not Yet Satisfied

Federal Reserve caps off 2022 with a slimmer rate bump. In December, the Federal Open Market Committee administered a 50-basis-point hike to the federal funds rate, following four straight 75-basis-point upward adjustments. The final rate lift of 2022 brought the lower bound target range to 4.25 percent, the highest mark since the global financial crisis in 2008. At the most recent meeting, the FOMC advised that additional increases are warranted to sustain downward pressure on prices. A terminal rate above 5 percent was intimated, representing another 75 basis points of elevation that could occur over the span of 2023. Despite headway slowing the pace of inflation, the Fed remains vigilant and wants more evidence of persistent price softening before holding the rate firm.

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