FOMC

"I expect that we will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed," Harker said.

Downshifting to a smaller move from the more aggressive rate increases the Fed rolled out last year would give officials more time to see how their actions are affecting the economy, Collins said.

Federal Reserve Bank of Kansas City President Esther George said the U.S. central bank should raise its benchmark interest rate above 5% and hold it there well into 2024 to bring inflation down.

"It will be appropriate to continue to raise rates at least at the next few meetings until we are confident inflation has peaked," Kashkari said.

Some analysts see the Federal Reserve cutting rates in late 2023, but others expect no rate cuts before 2024.

It is not clear whether FOMC members truly believe their higher inflation and interest rate forecasts, or if they are being overly hawkish to prevent further market exuberance.

Many believe the Federal Reserve will slow down rate increases beginning in December.. Steve Friedman, senior macroeconomist at MacKay Shields, will join us the day after the meeting to discuss what was done and what he expects in the future.

"This week will likely have been the last active week of the year, but it turned out to be quite eventful," according to Barclays PLC.

Outflows returned as Refinitiv Lipper reported $1.217 billion was pulled out of municipal bond mutual funds for the week ending Wednesday after $46.912 million of inflows the week prior.

The Fed chairman said he believes the Fed is getting close to a sufficiently restrictive level, but they're not quite there. While two good inflation reports are good, "there's still a long way to go to price stability."