Fed Plans Interest Rate Hike

By Staff Writer March 17, 2022 499
Federal Open Market Committee (FOMC) participants. Federal Open Market Committee (FOMC) participants.

At a meeting of the Federal Open Market Committee, officials said they expect inflation to return to its 2 percent objective and the labor market to remain strong.

To hit these goals, the committee decided to raise the target range for the federal funds rate to 0.25% - 0.50%, while anticipating “that ongoing increases in the target range will be appropriate.”

The board said the implications of the Russian invasion of Ukraine are “highly uncertain,” but will likely create near-term “upward pressure on inflation.”

In addition, the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.

“Indicators of economic activity and employment have continued to strengthen,” the board reported. “Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

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Last modified on Thursday, 17 March 2022 13:47