Interest rates might be at their peak, but, then again, they could still increase, the minutes of the December joint meeting of the Federal Open Market Committee (FOMC) and the Board of Governors of the Federal Reserve System Board showed, The New York Times reported.

In their final policy statement of 2023, Fed officials stated their judgement that policy “was likely now at or near its peak” as inflation moderated and higher interest rates seemed to be working as planned by making a change in one sentence.

“Members also agreed to modify the sentence in their postmeeting statement discussing the considerations relevant for future policy actions to indicate that the Committee would determine “the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time,”  the minutes state. “Members generally viewed the addition of the word “any” to this sentence as appropriately relaying their judgment that the target range for the federal funds rate was likely now at or near its peak for this policy tightening cycle while leaving open the possibility of further increases in the target range if these were warranted by the totality of the incoming data, the evolving outlook, and the balance of risk.”

Fed officials left interest rates unchanged in their Dec. 13 policy decision, and they predicted that they would cut borrowing costs three times in 2024. The meeting and its minutes suggested that the Federal Reserve is moving to a new phase in combating rapid inflation.

“Several participants remarked that the Committee’s past policy actions were having their intended effect of helping to slow the growth of aggregate demand and cool labor market conditions,” the minutes state. The officials “expected the Committee’s restrictive policy stance to continue to soften household and business spending, helping to promote further reductions in inflation over the next few years.”

In its attempt to bring down inflation from its March 2022 peak of 7 percent, the FOMC started raising interest rates to the current range of 5.25 to 5.5 percent, the highest in 22 years. Inflation has come down to 2.6 percent in the year through November, still higher than the Fed’s preferred rate of 2 percent.

Investors are predicting rate decreases to 3.75 to 4 percent by the end of 2024, with many expecting rate reductions to begin as soon as March, according to the Times.

Other parts of the economy are showing signs of slowing, the Times reported. While growth and consumption remain solid, hiring has decreased. Job openings recently fell to the lowest level since early 2021, the November jobs report showed.