From Fortune:

The Federal Reserve chose to leave its key interest rate unchanged last month, signaling that they expect to cut rates three times in 2024. Fed officials indicated in their interest-rate forecasts that a lower benchmark rate would be appropriate by the end of 2024, given progress toward taming inflation. They also emphasized the importance of remaining vigilant and keeping rates high until inflation decreases.

Chair Jerome Powell suggested that the Fed was likely done raising rates, but the minutes of the meeting show that Fed officials felt the economic outlook was uncertain enough that further hikes were still possible. However, they also sounded optimistic about the outlook for inflation, noting that supply chain backlogs were ending, rents were dropping, and job seekers were increasing.

Since March 2022, the Fed has raised its benchmark rate 11 times to a 22-year high of about 5.4%. Consumer prices were up 3.1% in November from a year earlier, down from a high of 9.1% in June 2022. The anti-inflation campaign has made steady progress, allowing the Fed to leave its benchmark rate unchanged since July.

The U.S. gross domestic product grew at a robust 4.9% annual rate from July through September due to strong consumer spending and business investment. The December jobs report is expected to show that 155,000 jobs were added last month, marking the 23rd straight month that unemployment has come in below 4%.

Hiring has decelerated, and job openings have fallen to the lowest level since March 2021, according to the Labor Department. The Fed sees a reduction in job openings as a way to reduce pressure on companies to raise wages, potentially aiding in lowering inflation.

The combination of decelerating inflation and a sturdy economy has raised hopes that the Fed can engineer a so-called soft landing — slowing economic activity just enough to tame inflation without causing a recession.



Read more: Fed chief Jerome Powell left interest rates unchanged last month but said further hikes are still ‘possible’