Even after latest rate hike, Fed won’t let guard down against inflation

THE US Federal Reserve once again pushed back on speculation that it was close to the end of its rate-hiking campaign.

A weak consumer price inflation report earlier this week had reawakened talk that the Fed would pivot away from its inflation battle sooner than previously anticipated. Sounding like a stern headmaster addressing a group of schoolchildren, Fed chairman Jerome Powell used his press conference on Wednesday (Dec 14) to prepare the markets for a long haul.

In its last policy move of a momentous year for the central bank, the Fed raised benchmark rates by 50 basis points to a 15-year high of 4.25 per cent to 4.5 per cent. That was a moderation of aggression after the 75 basis point hikes that emerged from each of the last four meetings.