Where do we stop?

A look at Inflation and the Fed Hikes

The questions on everyone’s mind are the following:

1. When will inflation reach 2%?

2. When will the Fed stop hiking?

3. Will they pivot?

We have CPI coming out on Tuesday, Dec 13 and the FOMC meeting decision on Wednesday, Dec 14. The consensus is that the Fed will raise rates by another 50 bps (0.50%).

The one thing however, that the Fed Chair recently said at Brookings is that they would continue at a slower pace (i.e., not 75bps anymore) but they didn’t know when they would stop. They also mentioned that they would need to hold the rate there but didn’t know for how long.

I looked at the CPI numbers and projected hikes to get some sense of where we could go.