![]() inflation data will be the key criteria determining that decision. He said that the July meeting will be “live,” signaling a strong possibility of another rate hike. In his press conference, Chair Powell emphasized that the Fed remains committed to decreasing inflation to the 2% target. The SEP’s median forecast for the policy rate this year increased as a result, showing one more rate hike as the base case. ![]() They suggest that the Fed believes policy is not yet sufficiently restrictive, though it has tightened substantially in the last two years. ![]() Together, these updated projections imply stronger growth and higher inflation than previously expected. Crucially, the forecasted inflation rate was revised higher as well. This year’s GDP growth forecast was revised upward, while the expected unemployment rate was revised down. The policy statement contained minimal changes to the key wording, which continues to signal that the committee will “closely monitor incoming information.” However, the updated Summary of Economic Projections (SEP) showed that the committee is thinking in a more hawkish direction. It now expects two more rate hikes from current levels, versus zero previously. Federal Reserve maintained the target range for the policy at 5.00% - 5.25% today, as expected, but revised upward its forecast for the rest of this year. But the committee’s updated economic projections signaled risks of another hike as soon as July. Federal Reserve kept rates steady at today’s policy meeting, as expected.
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