Fed raises interest rates by 75 basis points as expected

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(Finance) – The Federal Reserve, as widely expected, it raised interest rates by three-quarters of a pointbringing the indicative interval on Fed Funds at 3-3.25% and expecting further rate hikes in the future. This is what was decided by Federal Open Market Committee at the end of the two-day monetary policy in an attempt to curb inflation and reach the 2% target in the long run.

The decision to raise rates again was assumed unanimously by the twelve members of the FOMC, including President Jerome Powell and Vice President John Williams. At the same time, the Board assured that will continue to reduce the assets in the portfolio in line with the budget reduction plan announced last May.

The indicators recent – reads the statement – report a modest growth in consumption and production. The increases of jobs however they are confirmed robust and the unemployment rate is at its lowest. Inflation remains highreflecting supply and demand imbalances linked to the pandemic, rising food and energy prices and wider price pressures.

There war of Russia against Ukraine – it is emphasized – is causing enormous difficulties human and economic, is creating further upward pressure on inflation and weighing on global economic activity.

In making the appropriate monetary policy decisions, the FOMC ensures which will continue to monitor the economic outlook and says he is willing to adjust the orientation monetary policy if risks arise that could prevent the achievement of the objectives. The assessments – he specifies – will take into account a wide range of information, including data on public health, labor market conditions, inflationary pressures and inflation expectations and financial and international developments.

The Fed also released the new growth and inflation projectionsreviewing the growth of the 2022 GDP at 0.2% (from the previous 1.7%) and indicating growth of 1.2% in 2023 and 1.7% in 2024. The unemployment rate is expected at 3.8% this year and at 4.4 % in the following two years. Inflation was revised up to 5.4% from 5.2% in 2022 to 2.8% in 2023 and 2.3% in 2024. Based on these forecasts, i interest rates are expected to 4.4% in 2022 to 4.6% in 2023 and 3.9% in 2024.