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BackThe Federal Reserve raised interest rates by 0.25 percentage points to 3.75%-4%, the first increase since 2023
The Federal Reserve raised interest rates by 0.25 percentage points to 3.75%-4%, the first increase since 2023
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自由时报44 minutes agoBusiness1 min readChinaView original

The Federal Reserve raised interest rates by 0.25 percentage points to 3.75%-4%, the first increase since 2023

Federal ReserveRaise interest ratesfederal funds rate

Quick Look

  • Federal Reserve announced an interest rate hike of 0.25 percentage points on the 16th, raising the federal funds rate target range to 3.75%-4%, the first time it has raised interest rates since 2023.
  • The statement pointed out that inflation is still at a relatively high level, and this move will help inflation return to the 2% target faster.
  • Sixteen of the 18 policymakers expected at least one more interest rate hike before the end of the year.

AI-generated summary

Why It Matters

The U.S. Federal Reserve held an interest rate decision-making meeting on the 16th and announced a 0.25 percentage point increase in interest rates, the first rate increase since 2023. The statement pointed out that inflation is still at a relatively high level, and this move will help inflation return to the 2% target faster.

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US Federal Reserve Chairman Kevin Warsh explained the decision to raise interest rates at a press conference on the 16th. (Reuters)

[Financial Channel/Comprehensive Report] The U.S. Federal Reserve (Fed) held an interest rate decision-making meeting on Wednesday (16th) and announced a rate hike of 1 point (0.25 percentage points), the first rate increase since 2023. The Federal Reserve pointed out in a statement that 12 officials of the Federal Open Market Committee (FOMC) unanimously agreed with this decision. The reason for raising interest rates is that inflation is still at a relatively high level. This move will help bring inflation back to the 2% target faster.

The Federal Reserve pointed out in its latest economic forecast that 16 of the 18 policymakers expected to raise interest rates at least once by 0.25 percentage points before the end of this year, and only 2 believed that interest rates would remain unchanged from current levels. All but one of the policymakers said they saw upside risks to inflation and no longer believed those risks stemmed primarily from one-off supply shocks.

Please read on...

The following is the full text of the Federal Open Market Committee's statement:

The Federal Open Market Committee voted 12 to 0 to adopt the following statement for public release:

The Committee decided to raise the target range for the federal funds rate by 0.25 percentage point to 3.75% to 4% to support the Fed's dual mission. The Committee continues to maintain the banking system's policy of adequate reserves.

Economic activity is expanding at a steady pace. Domestic spending showed resilience, although uncertainty remains at high levels, partly due to geopolitical developments. Productivity growth has been strong and capital investment has been solid. Employment continued to increase at a rate consistent with the growth of the labor force, while the unemployment rate remained almost unchanged.

Inflation remains at a relatively high level. Today's policy action will help bring inflation back to the Committee's 2 percent target in a more timely manner. The Committee will work towards price stability.

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What to Watch

AI outlook — possibilities, not facts

  • The U.S. Federal Reserve will raise interest rates by at least another 0.25 percentage point before the end of the year

    Very likely · Within months

Open Questions

  • How will the extent and timing of future interest rate increases be determined?
  • When will inflation continue to fall back to the 2% target?
  • What will be the specific impact of this interest rate hike on U.S. economic growth and the job market?

Related Topics

Federal Reserve
PeopleKevin Warsh
OrganizationsFederal Open Market Committee
PlacesUnited States
TopicsRaise interest ratesfederal funds rateInflationFOMCeconomic forecastinterest rate decisions
This article was originally published by 自由时报.

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