FOMC

The Fed in a statement said Brainard submitted her resignation Tuesday, and that it will be effective on or around Feb. 20.

Two officials said Tuesday that interest rates may need to move to a higher level than anticipated to ensure inflation continues to ease.

The Federal Reserve will likely have to keep raising interest rates to rein in price growth, which could slow economic expansion and affect the jobs market, Governor Michelle Bowman said.

"We actually are increasing the odds — we can get a soft landing. That doesn't mean we're out of the woods," Harker said.

The central bank has raised rates aggressively for nearly a year, but experts believe the hiking cycle is nearly over.

Federal Reserve Bank of New York President John Williams said forecasts officials submitted in December are still a good guide for where interest rates are headed this year and that policy may need to stay at restrictive levels for a few years to get inflation down.

"We think we are going to need to do further rate increases," Powell said Tuesday.

"We need to raise rates aggressively to put a ceiling on inflation, then let monetary policy work its way through the economy," Kashkari said.

Federal Reserve Bank of Atlanta President Raphael Bostic said January's strong jobs report raises the possibility that the central bank will need to increase interest rates to a higher peak than policymakers had previously expected.

"Investors are acknowledging that the Fed is nearing the end of its rate tightening cycle which is supporting a relief rally in stocks and lower bond yields, said Bryce Doty, senior vice president at Sit Investment Associates.

Analysts opine on the Federal Open Market Committee meeting, how high interest rates will go and when the first cut may happen.

Kansas City Fed President Esther George said officials don't want to raise interest rates by so much that policy becomes overly restrictive and the economy can avoid a sharp downturn.

Bullard says Fed rates need to stay on tighter side in 2023

"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.