The long-anticipated decision from the Federal Open Market Committee today was to raise the Fed Funds Rate by a quarter point, the first hike in three years, as the Fed moves to combat rising inflation risks.
The Committee voted unanimously to lift rates to a new target range of 3.75% – 4%. The updated dot plot showed 16 of the 18 participants expecting at least one more hike before year-end, with four of those anticipating two. The Committee does not expect to reach its 2% inflation target until 2029.
The move itself was widely expected, with markets pricing in better than 90% odds heading into the decision. In his post-meeting press conference, Chair Warsh struck an optimistic tone on economic growth and employment, but acknowledged that inflation remains sticky, reaffirming that bringing it down to the 2% target remains the Fed’s central goal.
