Happy New Year! I'm unsure if I want to ring in this New Year or hang out in a bunker until 2025. Although inflation has somewhat eased in 2023, it remains well above the Federal Reserve's (FED) target rate of 2%. The central bank has maintained its benchmark federal funds rate, which influences the borrowing rates for commercial banks at nearly 5.5%. The FED vowed to fight inflation until it returned to its target rate. At its recent interest decision meeting, the FED Chairman, Powell, indicated a pause in rate hikes and insinuated possible rate cuts in 2024. It appears that the FED's plan to fight inflation did not occur in its expected timeframe.
Welcome to the 2024 election year. While the FED is supposed to be an independent branch of the government, it makes you wonder when they shift from fighting the worst inflation since the 1980s to cutting rates in an election year when inflation is still well above their target level.
