January's personal consumption expenditures (PCE) price index came in hotter than expected today, rising 5.4% from a year earlier vs. a 5% increase in December.

According to the Fed minutes, "maintaining a restrictive policy stance until inflation is clearly on a path toward 2 percent is appropriate from a risk-management perspective."

"We think we are going to need to do further rate increases. The labor market is extraordinarily strong," Powell said Tuesday.

Minutes from the FOMC's December meeting include an unusually blunt warning to investors, cautioning against underestimating the Fed's will to keep interest rates high for some time.

Nellie Liang, the U.S. Treasury Department's undersecretary for domestic finance, says that the need for a digital dollar doesn't currently exist and that the U.S. might adopt a CBDC several years from now, if a lot of other countries do so first.

"The time for moderating the pace of rate increases may come as soon as the December meeting," Fed Chair Powell said yesterday.

They foresee slowing the pace of rate hikes in the near, while emphasizing that a 50 bps increase next month would still be significant.

Persistent high inflation may lead the Fed to keep up the regular rate hikes till the fed funds rate reaches 5.5%.