The Fed: Fed approves third large interest rate hike and signals more before year-end

by | Sep 21, 2022 | Stock Market

The Federal Reserve on Wednesday continued their aggressive fight against high inflation, agreeing to the third straight super-sized interest rate hike and saying that rates are going to go sharply higher before the end of the year. Officials said they would raise their benchmark federal-funds by 0.75 percentage point to a range of 3% to 3.25%, and penciled in another 125 basis points in rate hikes by year end. That would bring the benchmark rate to a midpoint of 4.4% by the end of the year, up from the prior estimate in June of 3.8%.

The central bankers now see a “terminal” rate of 4.6% in 2023. In keeping with their “higher for longer” rhetoric, the central bank doesn’t see any rate cuts until 2024.  In a statement, the Fed said job growth has been “robust” even with modest economic growth. “The FOMC is strongly committed to returning inflation to its 2% target,” the statement said. According to new projections from the Fed, the central bank will reach its inflation target in 2025. Economists believe that the August consumer price data, which showed a jump in core inflation, was a “game changer” for the Fed because it showed t …

Article Attribution | Read More at Article Source

Share This