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Fed Runs Out of Patience as It Homes In on Short-Term Inflation

  • Powell flags rising expectations to justify 75 bps rate hike
  • Shift behind hawkish projections for higher rates through ‘23
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Fed's Powell: Inflation Developments Warranted Bigger Hike

Federal Reserve officials have run out of patience with high inflation. That means heightened focus on short-term indicators that were previously played down in favor of longer-term ones, and a hawkish pivot on policy.

In explaining a surprising shift toward a faster pace of tightening -- the central bank raised its benchmark interest rate by 75 basis points on Wednesday and signaled much more to come -- Fed Chair Jerome Powell pointed to fresh data on food and energy prices, as well as household inflation expectations.