The Federal Reserve on Dec. 13 held the Federal Funds Rate-the rate at which banks lend to each other-steady at 5.25 percent to 5.5 percent, as the consumer inflation once again cooled to 12-month average level of 3.1 percent, according to the latest data compiled by the Bureau of Labor Statistics.
Shelter has steadily increased 6.5 percent the past 12 months, including 0.4 percent in November, following 0.6 percent and 0.3 percent increases in September and October.
A slowdown is accompanied by one final push in inflation, as during the Great Recession, when inflation peaked at 5.6 percent in July 2008.
30-year mortgage interest rates appear to be cooling off their recent highs of 7.8 percent in October and are down to an average of 6.95 percent as of Dec. 14.
Looking forward, the Fed is projecting the Gross Domestic Product will slow down to 1.4 percent in 2024 before recovering 1.8 percent in 2025 and 1.9 percent in 2026.
The Fed is still projecting that unemployment will rise from its current level of 3.7 percent to 4.1 percent in 2024, an implied 673,000 jobs that might be lost in the next year.
That might be a consequence of the Fed waiting to begin hiking interest rates until after Russia invaded Ukraine in Feb. 2022, when inflation was already at 7.5 percent.
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