FOMC

"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."

The CPI report showed inflation had slowed to 7.1%, giving investors confidence the Federal Open Market Committee will hike rates 50 basis points as expected following Wednesday's much-anticipated meeting.

The December Federal Open Market Committee meeting, combined with the release of inflation data, "will test the good cheer currently prevailing in the bond market," said MSCI Research strategists Andy Sparks, Tamas Hanis and Edina Szirma.

Investors will be greeted Monday with a new-issue calendar estimated at $3.214 billion, the majority of which is a nearly $1.9 billion private activity P3 bond deal from Pennsylvania.

The Federal Reserve Bank of Chicago appointed Austan Goolsbee, an economist and former adviser to President Barack Obama, as its new president to replace Charles Evans, who retires in January.

The Federal Reserve will slow the pace of interest-rate increases next month, Federal Reserve Chair Jerome Powel suggested Wednesday, while stressing borrowing costs will need to keep rising.

The Bloomberg Municipal Index is at positive 4.06% as of Friday. Bloomberg indices show high-yield returning 4.17%, taxable munis returning 4.38% in November while the Impact Index is at positive 4.66%.

Markets took the news that it will soon be appropriate to increase the Fed funds target rate at a slower pace as good news.

Federal Reserve Bank of St. Louis President James Bullard urged policymakers to raise interest rates further, saying the level will need to be higher to meet the central bank's goal to be "sufficiently restrictive" to bring down inflation.

Federal Reserve officials stressed the need to keep raising interest rates while acknowledging recent encouraging news on U.S. consumer prices.

Federal Reserve Governor Christopher Waller said "we've still got a ways to go" before the central bank stops raising interest rates, despite good news last week on consumer prices.

The Federal Reserve looked closer to moderating aggressive interest-rate increases after welcome news on inflation, with three officials backing a downshift even as they stressed that policy needs to stay tight.

Boston Federal Reserve Bank President Susan Collins said monetary policy is entering a new phase that could require smaller rate increases.

High-yield saw outflows of $867.067 million after $594.497 million of outflows the week prior while exchange-traded funds saw inflows of $736.967 million after $444.544 million of inflows the previous week.