The Federal Reserve raised interest rates by 75 basis points (bps)—the biggest increase since 1994—and Chair Jerome Powell signaled another big move next month, intensifying a fight to contain rampant inflation.

Slammed by critics for not anticipating the fastest price gains in four decades and then for being too slow to respond, Powell and colleagues on Wednesday intensified their effort to cool prices by lifting the target range for the federal funds rate to between 1.5 percent and 1.75 percent.

He said another 75 bps hike, or a 50 bps move, was likely at the next meeting of policymakers. They forecast interest rates to rise even further this year, to 3.4 percent by December and 3.8 percent by the end of 2023. That was a big upgrade from the 1.9 percent and 2.8 percent that they penciled in for their March projections.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.