Fed Claims Progress Against Inflation But Victory Not Yet Declared
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Inflation has fallen steadily since peaking at 9.1% in June 2022, and is now near the Fed's 2% target. Goods prices have fallen for 6 months.
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The Fed seems close to defeating inflation without causing a recession or spike in unemployment as many predicted.
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Fed Chair Powell acknowledges progress but says no one is declaring victory yet. Further evidence of falling inflation is needed.
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But economists now believe the Fed has likely won the battle against inflation as price spikes moderate overseas too.
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With inflation cooling, the Fed now projects interest rate cuts starting in 2023 rather than further hikes. Markets expect cuts to begin as soon as March.