Fed Delivers Third-Straight Big Hike, Sees More Increases Ahead
Federal Reserve officials raised interest rates by 75 basis points for the third consecutive time and forecast they would reach 4.6% in 2023, stepping up their fight to curb US inflation that’s persisted near the highest levels since the 1980s.
Wednesday’s decision by the Federal Open Market Committee, which was unanimous, lifts the target range for the benchmark federal funds rate to a range of 3% to 3.25% -- the highest since before the 2008 financial crisis, and up from near zero at the start of this year.
Fresh projections indicate a fourth-straight 75 basis-point hike could be on the table for the next gathering in November, about a week before the midterm elections.
In a statement following a two-day meeting in Washington, officials led by Chair Jerome Powell repeated that they are “highly attentive to inflation risks.” The central bank also reiterated it “anticipates that ongoing increases in the target range will be appropriate,” and “is strongly committed to returning inflation to its 2% objective.”
Powell will hold a press conference at 2:30 p.m.
Policy makers now expect the key rate to rise to 4.4% by year-end and 4.6% during 2023, according to the median estimate in updated quarterly projections published alongside the statement.
Further ahead, rates were seen stepping down to 3.9% in 2024 and 2.9% in 2025.