United States Federal Reserve's Federal Open Market Committee (FOMC) announced on Wednesday that it will increase the target range for the federal funds rate by 50 basis points to between 4.25% and 4.5%, ending a series of four straight 0.75 percentage point rate hikes.
The central bank expects "ongoing increases" of the key interest rate to get to a monetary policy stance "sufficiently restrictive to return inflation to 2 percent over time." The Fed added it will keep monitoring "the lags with which monetary policy affects economic activity."
The US central bank's latest projections showed that it sees the interest rate at around 5.1% at the end of 2023 and at around 4.1% at the end of 2024, 0.5 percentage points and 0.2 percentage points higher, respectively, compared to the previous estimate, with no rate cuts before 2024. Expectations for GDP growth in 2023 and 2024 declined from the September forecast, while unemployment and core PCE inflation projections were revised upward for both years.
