What is the Fed thinking?

From Marketplace, I'm Sabrie Beneshore in for David Brancaccio.

The Federal Reserve decides what to do with interest rates in this country,

the people who do the deciding at the

Fed have been talking as they do. The Fed presidents, Fed governors, the Fed chair

sharing their views on what the right move may be to deal with inflation that has proven stubborn.

The Fed wants inflation down to 2% but it keeps not getting there.

Month after month, Diane Swank is chief economist at the audit tax and advisory firm KPMG and joins us.

Hi Diane.

Good morning.

So we have heard from about a half a dozen Fed officials this week.

What are they thinking?

Well, what we're hearing is sort of a constant drumbeat of the Fed dialing down when they actually

think they're going to cut rates. And that's really important because that sort of higher for longer or

hold rates where they are really sort of hit home the hardest when the chair Powell actually

echoed that sentiment even though it was nothing new but

for the Fed the reality is it's still too hot to give up and not risk the economy

re-accelerating and stoking a more pernicious inflation when we're this close to the price.

Bond markets have started to anticipate that the Fed will keep rates higher for longer. The 10-year yield is getting fairly high.

That is already having impacts in the economy. What might those be?

Exactly. We are seeing already mortgage rates go up quite substantially.

Ironically in the same point in time where we just saw pending home sales soared.

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