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The Federal Reserve raised the target range for its benchmark interest rate by 0.25% on Wednesday and left the door open to more rate hikes.
The rate hike brings the Fed’s policy rate, the federal funds rate, to a new range of 5.25% and 5.5%, the highest level since March 2001. Wednesday’s rate hike marks the eleventh rate hike since March 2022 and comes after the central bank took a breather in June.
The Fed said future rate hikes would be contingent on the impact of previous rate hikes on the economy and financial developments.
In Wednesday’s statement the Fed repeated, “In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Officials added that they will continue to assess additional information and its implications for monetary policy.
Fed officials reiterated in their statement that they still view inflation as “elevated,” and note that they remain "highly attentive" to inflation risks, despite a cooler reading on inflation in June.
Officials upgraded their assessment of the economy, characterizing growth as “moderate,” up from “modest” last meeting.
Back in June, officials penciled in two more rate hikes for the second half of the year based on higher expectations for core inflation. The Fed now expects inflation to end the year closer to 4% up from 3.6% previously, nearly double the Fed’s inflation target.
With one rate hike down and potentially one more to go, the central bank would need to see more readings on inflation that show cooling like the last reading on the consumer price index.
Core CPI inflation fell to a 20-month low, rising 4.8% in June, compared with a rate of 5.3% in May, and down from 5.6% at the start of the year. On a headline basis, inflation has fallen from a peak of 9% to 3%, the lowest level since March 2021.
As part of its most aggressive rate hiking campaign since the 1980s, the US central bank has increased the target range for its benchmark interest rate — the fed funds rate — by more than 5 percentage points since March 2022.
The decision was unanimous.
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Read the latest financial and business news from Yahoo Finance
https://finance.yahoo.com/news/federal-reserve-interest-rate-decision-july-26-150040841.html
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The rate hike brings the Fed’s policy rate, the federal funds rate, to a new range of 5.25% and 5.5%, the highest level since March 2001. Wednesday’s rate hike marks the eleventh rate hike since March 2022 and comes after the central bank took a breather in June.
The Fed said future rate hikes would be contingent on the impact of previous rate hikes on the economy and financial developments.
In Wednesday’s statement the Fed repeated, “In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Officials added that they will continue to assess additional information and its implications for monetary policy.
Fed officials reiterated in their statement that they still view inflation as “elevated,” and note that they remain "highly attentive" to inflation risks, despite a cooler reading on inflation in June.
Officials upgraded their assessment of the economy, characterizing growth as “moderate,” up from “modest” last meeting.
Back in June, officials penciled in two more rate hikes for the second half of the year based on higher expectations for core inflation. The Fed now expects inflation to end the year closer to 4% up from 3.6% previously, nearly double the Fed’s inflation target.
With one rate hike down and potentially one more to go, the central bank would need to see more readings on inflation that show cooling like the last reading on the consumer price index.
Core CPI inflation fell to a 20-month low, rising 4.8% in June, compared with a rate of 5.3% in May, and down from 5.6% at the start of the year. On a headline basis, inflation has fallen from a peak of 9% to 3%, the lowest level since March 2021.
As part of its most aggressive rate hiking campaign since the 1980s, the US central bank has increased the target range for its benchmark interest rate — the fed funds rate — by more than 5 percentage points since March 2022.
The decision was unanimous.
Click here for the latest economic news and economic indicators to help you in your investing decisions
Read the latest financial and business news from Yahoo Finance
https://finance.yahoo.com/news/federal-reserve-interest-rate-decision-july-26-150040841.html
Sent from my iPhone using TSP Talk Forums
