We just got confirmation that interest rates on mortgages, cars, and credit cards will keep getting more expensive in 2023

• The Federal Reserve's December minutes confirmed interest rates won't be cut in 2023.
• It noted that as long as inflation is well above 2%, continued interest rate hikes will be necessary.

Borrowing money to buy a house or a car won't get any cheaper this year, the nation's central bank just confirmed.

On Wednesday, the Federal Reserve released its minutes from the Federal Open Market Committee's (FOMC) December meeting, when it announced it would be raising interest rates by 50 basis points. That increase was a slowdown from prior meetings when the Fed raised rates by 75 points, and it came after November marked a slowdown in inflation to 7.1% year-over-year.

While the economy appears to be moving in the right direction, the Fed noted in its minutes that inflation is "unacceptably high" and still remains well-above the pre-pandemic level of 2% — and it anticipates rate hikes will continue throughout 2023.

"No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023," the minutes said. "Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time."

This means that while the Fed might lower the pace at which it raises interest rates throughout the year, taking on loans to buy a house, car, or mortgage will keep getting more expensive.

There is significant uncertainty going into 2023 in terms of how the Fed's aggressive tactics in 2022 will impact the economy, whether it will trigger a recession, and how severe of a recession it would end up being. As Insider previously reported, there is a lag in monetary policy in which it could take a year — or more — for the economy to respond to interest rate hikes, suggesting the worst impacts of inflation are yet to come.

The Fed's December minutes also emphasized that uncertainty going into this new year. It said that prices could stay high longer than anticipated if the labor market stays tight, and "China's relaxation of its zero-COVID policies, Russia's continuing war against Ukraine, and effects of synchronous policy firming by major central banks" raise other uncertainties in terms of their impacts on the US economy, as well.

The minutes did not indicate what rate increase the Fed will pursue at its next FOMC meeting in February. Minneapolis Federal Reserve President Neel Kashkari wrote in a blog post on Wednesday that to reach a level of 2% inflation, the Fed should continue raising rates and pause those efforts once it reaches a level of 5.4%, saying that rates should only be cut "once we are convinced inflation is well on its way back down to 2 percent."

"The mistake the FOMC must avoid is to cut rates prematurely and then have inflation flare back up again," Kashkari wrote. "That would be a costly error, so the move to cut rates should only be taken once we are convinced that we have truly defeated inflation."

Fed Chair Jerome Powell said in December that he thinks it's still possible for the US to fight inflation while avoiding a recession, but his primary goal is to lower inflation — and he will continue raising rates to do so.

"I don't think anyone knows whether we're going to have a recession or not," Powell said. "And if we do, whether it's going to be a deep one or not, it's just, it's not knowable."