Preparing to Pause - December 2022

After six consecutive 0.75% increases the Federal Reserve increased the Fed Funds interest rate on Wednesday, December 14, 0.50%. On Thursday, December 15, the Bank of England followed with a 0.50% increase to their own policy rate after having increased 0.75% in November. There are signs beginning to emerge that suggest inflation is peaking globally.  Central banks are taking notice and slowing the pace of interest rate increases.   They hope to reach a level where they will feel comfortable pausing the current rate increase cycle.  This will allow them to observe how the previous rate hikes impact the economy over time.