This article is published in collaboration with Statista
by Felix Richter
Faced with the highest inflation in more than 40 years, the Federal Reserve has taken aggressive action this year. As a result of its last policy meeting, the Federal Open Market Committee (FOMC) announced on Wednesday that it was raising the target range for the federal funds rate to 3.75 to 4.00. The fourth 75 basis point hike in five months follows an already aggressive 50 basis point increase in May and marks the fastest upward movement of the key interest rate since the early 1980s, when the Fed battled the highest inflation on record.
Fed Chairman Jerome Powell said in a press conference announcing the latest decision that "there's some ground to cover" until the funds rate would be sufficient to slow inflation. He added that the end point of rate hike was still "very uncertain".
The latest projections made by FOMC members about the upcoming months and years hail back to the committee's September meeting. The median projection of the midpoint of the appropriate target range at the end of this year is 4.4 percent, up from a March projection of 1.9 percent. The FOMC meets once more in 2022 - from December 13 to 14. Rate hikes could continue in 2023, with the median projection from committee members raised to 4.6 percent for the end of 2023, up from 2.8 percent in March.
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