Federal Funds rate how high will it go
how high will the Federal Reserve raise the federal funds rate? well, according to the Taylor Rule/Principal for monetary policy Volker and Greenspan monetary policy with inflation at 8.7%, then the federal funds rate should be increased to 7% to 8%. simplified version is the federal funds rate should be increased +1 point for each point increase in the inflation rate.
I would not be surprised to see the increase the federal funds rate in 1/2 point increments instead of 1/4
point increments.
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Unfortunately how much/how fast it should be raised and how much/fast it is being raised are not the same thing. The Fed should have been raising rates last year, they are already behind the curve. Nov 2021 we had a CPI of 6.8% and they didn't institute the first increase until last month. And the increase was a measly .25% to bring the fed funds rate to .5%.
Good job bringing a fire extinguisher to a forest fire...