VIDEO: Watch as Fed Hikes Interest Rates to Highest Level in 15 Years + Full Press Conference
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 policy.
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 cause to pause and allow its monetary policy’s tightening policy’s total impact to make its way through the American economy.
The consensus on the street is that 2024 will see the Fed begging 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%, with the goal of settling into the long-run neutral level of 2.5%.
Speaking at the press conference following the announcement, Fed Chair Jerome Powell stated:
Read More:
Here’s What Investors Need to Know Ahead of the Final Fed Meeting of 2022 (VIDEO)
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