United States Federal Reserve expects “ongoing increases” in the federal funds rate and a “period of below-trend growth” as it continues its efforts to knock inflation down to 2%, the Fed’s Board of Governors stated in its latest Monetary Policy Report on Friday. Inflation in the services sector, excluding housing, “remains elevated, and prospects for slowing inflation may depend in part on an easing of tight labor market conditions,” the board underlined. Fed governors noted that recent data suggest that “high inflation is not becoming entrenched,” but added that the jobs market is still “extremely tight” due to a “significant labor supply shortfall.””Financial conditions have tightened further” since the previous report in June 2022, and rate hikes have “weighed on financing activity,” according to the Fed. “Real gross domestic product (GDP) growth picked up in the second half of 2022, although the underlying momentum in the economy likely remains subdued,” the board also wrote.