The Federal Reserve on Wednesday afternoon announced another interest rate hike to kick off 2023, the central bank's eighth consecutive hike that pushed the key interest rate another .25 percent higher a 4.75 percent cap — its highest level since fall 2007...and we all remember how the economy fared through 2008.
The Federal Open Market Committee (FOMC) statement accompanying the decision acknowledged that inflation "remains elevated" before explaining that "ongoing increases" will be appropriate:
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. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
In his press conference following the rate hike, Federal Reserve Chair Jerome Powell said he and the Fed feel the "hardship" brought by inflation, but said there was more work to be done and reiterated the FOMC's statement that "ongoing increases will be appropriate."
“We continue to anticipate that ongoing increases will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” Fed Chair Powell says. https://t.co/RJiXx60A4L pic.twitter.com/aUTCTRRdLV— TheStreet (@TheStreet) February 1, 2023
Powell has been trying to use interest rate hikes to choke the U.S. economy and force inflation down to the goal of just two percent. So far, inflation has not collapsed, although the economy showed some signs of slowing in the December 2022 consumer and producer inflation data released in January.