The Fed has to portray itself as tough on inflation even as it pushes through a smaller rate hike

The Federal Reserve is expected to raise interest rates by a smaller half percentage point Wednesday yet signal that its battle with inflation is still far from over. The central bank is also slated to release new forecasts for interest rates and the economy when it winds down its two-day meeting Wednesday afternoon. Fed officials have indicated they would reduce the size of rate hikes, after four straight three-quarter percentage point hikes in a row. Fed officials may take some comfort in the latest data on inflation, but they likely won’t show it. November’s consumer price index, released Tuesday, showed signs inflation is cooling though still at a high 7.1% annual pace. That was below the 7.7% rate of October and less than the 7.3% expected by economists.
Source: CNBC – Bonds