The Federal Open Market Committee (FOMC) announced a widely expected 0.25 percentage point increase in the Fed funds rate on Wednesday, bringing the benchmark overnight interest rate to between 5.25%-5.50%. This marks the 11th hike since March 2022 when monetary policy began to tighten and brings the rate to its highest level in 22 years.
In their statement, FOMC repeated that “determining additional policy firming necessary” for lowering inflation back down to their 2% target will depend on various factors such as economic and financial developments alongside inflation itself. The committee also noted that recent indicators suggest moderate economic activity growth with robust job gains and low unemployment rates while still acknowledging elevated inflation levels remain present as well .
Most officials predicted two more hikes this year during June’s meeting; however, without any fresh language suggesting otherwise it appears likely another raise is coming soon . Charles Krawitz , chief capital markets officer at Alliant Credit Union , responded by saying “the 25-bp increase shows commitment from Fed towards further raises based off data” . He went on further noting after September’s potential raise rates should stabilize before heading downward again although exact timing remains uncertain yet embraced by many nonetheless .
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