Hikes of the Federal Funds Rate can have a delayed impact for certain factors (i.e.-inflation) of around 12 to 18 months but we can see that mortgage interest rates have begun to rise rapidly recently, as well as the strength of the dollar.

As far as the terminal rate, it's my understanding that what got the United States out of the inflation in the late 1970s - early 1980s was raising the Funds Rate above the curve of inflation. If core annual inflation is 6.6% as of September 2022 and this number is well below the actual inflation we're experiencing, a terminal rate of 5% would still be well behind the curve of inflation and it's very possible we would still be in stagflation or inflation would appear like it had gone away, only to return stronger.

A big question is if the FED will stop raising rates or even cut rates before inflation is ameliorated sometime in Q1 or Q2 of 2023 and what that would mean for the future of the US economy.