Fed officials support additional policy tightening

In order to combat high inflation in the economy, the Fed will most likely be forced to raise the key interest rate above 5.1%, and then hold it at that level until 2024.

New York Fed President John Williams, San Francisco Fed President Mary Daly, and Cleveland Fed President Loretta Mester made hawkish statements that indicate the Fed's intention to ease price pressures in any way possible.

According to Williams, he does not predict a recession and is ready to take all necessary measures to bring inflation back to the central bank's 2% target. He also added that the peak level of interest rates may be higher than expected.

Mary Daly said in her statement that she did not share the markets' optimism about inflation. In addition, she noted that her personal expectations coincide with the peak value of 5.1%, which is predicted by most of her colleagues.

U.S. central bank officials expect an estimated 0.5% GDP growth in 2023. According to Mester, even though the situation cannot be called a recession, such low growth rates suggest that any sudden blow may cause a contraction in GDP. In addition, Mester added that she is among the Fed officials who are in favor of raising the rate above the 5.1% level.