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Members of the 12 different banks of the Federal Reserve (Fed) prepare to which will be the first meeting of the year of the board and which is expected to define the line that the central bank will follow this year to continue its fight against inflation.
The rise in prices has been contained in the last six months, with constant falls since the peak of 9.1% registered in June of last year; In December, inflation was 6.5% in its annual measurement, according to the report from the Bureau of Labor Statistics (BLS).
However, the rate at which inflation increased during the last month of the year was rated as “modest or moderate” by members of the Fed’s 12 banking districts, according to records in the central bank’s so-called Beige Book, a report released before each meeting of the Federal Open Market Committee.
This report serves as a context guide in which the members of the Fed pour the vision they have of the economy; that is to say, a preview of what they will discuss at the board meeting.
How Fed members view the economy in 2023
According to records, Fed members considered that, during the Christmas selling season, lthe retailers had problems to transfer their production costs.
This was a consequence of the fact that consumers, who had had months of strong consumption, they were more reluctant to pay higher priceswhich had the opposite effect for retailers, who chose to apply discounts to their products to remove their inventories and avoid a crisis with which they went through at the beginning of 2022.
But at the same time, producers in the 12 Fed Districts indicated that freight costs were down, but the prices of raw materialsincluding wood and steel, remained high.
The labor market: the concern of the Fed
Specialists and economists had already warned that the Fed could change its interest in the labor market, because as long as it remains solid, prices will hardly go down at the rate needed to bring inflation to the 2% target.
For now, the members of the Fed continue to see that the labor market remains tight, with companies that They are still having trouble filling their vacancies.which also causes strong wage growth.
The members of the Fed also pointed out that, despite the fact that some sectors of the economy such as technology undertook thousands of layoffs in recent months, companies in other sectors they hesitated to fire their workers.
The next Fed meeting is scheduled to take place from January 31 to February 2.
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