Data from the Federal Reserve Bank of Cleveland suggests that inflation is stabilizing. CPI (Consumer Price Index) rose by 0.61% from January to February 2023 compared to 0.65% from December 2022 to January 2023. Year to date, CPI rose by 6.35%. At an event at the Economic Club of Washington earlier this month, Fed Chairman Jerome Powell corroborated on the data, saying that he expects inflation to ease but interest rate to potentially increase.
At its most recent meeting, the Fed raised interest rates a quarter percentage point, the eighth increase since March 2022, to a range of 4.5%-4.75%. The Fed projects that interest rates will fall back to the 2% range sometime in 2024. In a continued effort to reach its interest rate target, the Fed will also begin quantitative tightening by passively reducing its balance sheet.
Sources: Federal Reserve Bank of Cleveland, CNBC, Federal Reserve Bank of Richmond