VIDEO: Watch as Fed Hikes Interest Rates to Highest Level in 15 Years + Full Press Conference

In its Ongoing Battle Against Inflation, Federal Reserve Chair Jerome Powell Announced Today an Additional Rate Hike of 0.5 Points, Pushing Interest Rates to Their Highest Level Since Late 2007

As the market expected, the Federal Reserve announced this afternoon that it has raised interest rates by half a point, moving the federal funds target rate range to 4.25% – 4.5%. Today’s half-point raise comes on the heels of four consecutive three-quarter-point rate hikes, signalling to the market that the Fed is potentially beginning to pull back on its aggressive monetary policy tightening.

Still, the Fed has already signalled that investors should expect a total of 0.75 points worth of additional rate hikes in 2023. That would bring the Fed’s target rate range to 5%-5.25.

From here, it is expected that the Fed will take its foot off the gas to pause and allow its monetary policy’s policy’s total impact to make its way through the American economy.

The consensus on the street is that 2024 will see the Fed begin cutting rates, likely by a whole point over the course of a year, which would bring interest rates back down to 4.1%. The Fed is expected to continue cutting rates in 2025 by an additional point, bringing rates down to 3.1%, to settle into the long-run neutral level of 2.5%.

Speaking at the press conference following the announcement, Fed Chair Jerome Powell stated:

“Inflation data received so far for October and November show a welcome reduction in the monthly pace of price increases. But it will take substantially more evidence to have confidence that inflation is on a sustained downward path”.