We'll end the year with yet another look at inflation and the Fed's projections.
• The FOMC statement is usually just one page. Key takeaway is a planned Fed rate of 4.25 - 4.5% at the end of 2023. "The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-1/4 to 4-1/2 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time." • The Federal Reserve - Summary of Economic Projections. In Figure 5, the Fed shows that it thinks that a return to "2%" is not realistic until 2026. Their median projection shows the Fed rate dropping below 3% in the fall of 2025.
• Federal Reserve issues FOMC statement December 14, 2022, 2:00 p.m. EST https://www.federalreserve.gov/newsevents/pressreleases/monetary20221214a.htm • Federal Reserve - Summary of Economic Projections December 14, 2022, 2:00 p.m., EST https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20221214.pdf • BLS - CONSUMER PRICE INDEX – NOVEMBER 2022
Current Release: Dec. 13, 2022 08:30 AM Next Release: Jan. 12, 2023 08:30 AM https://www.bls.gov/schedule/news_release/cpi.htm https://www.bls.gov/news.release/pdf/cpi.pdf
• BEA PCE - Personal Consumption Expenditures Price Index
Current Release: December 1, 2022, 2022
Next Release: December 23, 2022
Purchasing power from paychecks fell for middle-income households in 2022, while rising for those at the bottom and top.
Inflation is often called a tax on the poor, but this time it’s hit middle-income households the hardest.
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