News & Insights

Welcome to the FIA News & Insights, a one-stop resource that includes insights from senior investment professionals on timely market events, their views on the economy and their respective markets.  Find updates on the latest media information on Frost Investment Advisors, LLC and the most recent reprints, as well as, archival information for your reference.

News and Views image.

News & Views

Provided by the Investment Professionals of Frost Investment Advisors | December 12 , 2022

Fed Increases 2023 Rate Target as Inflation Slows; Macro Variables Imply No Recession Now…But Wait for It

Fed Raises End-of-2023 Rate Forecast to 5.1% Citing Slower than Expected Inflation Decline

As it raised the federal funds rate another 50 basis points, the Federal Reserve made several changes to its forecasts including the expectation of its overnight rate ending 2023 at 5.1% instead of 4.6% percent in September. Seventeen of the 19 FOMC participants said risks of inflation are to the upside, suggesting that the committee expects the rate to move even higher. The Fed cited a slower than expected decline of inflation. Though Chairman Jerome Powell played down the risk of recession, the projections also appear to imply an increased risk of a downturn. Powell and company increased their unemployment forecast for next year while also lowering their GDP forecast to a scant 0.5%. History is not on Powell’s side, as an increase in unemployment of more than one percentage point almost always coincides with a recession.

Click here to view full article.

Subscribe to our News & Insights

Get the latest posts straight to your inbox