preliminary report! US Federal Reserve SystemFederal Reserve System), Federal Open Market Committee (FOMC) Policy interest rateIncreased to the range of 0.25 to 0.50 percent.
In a statement from the Federal Reserve Board, interest The decision to increase the rate of increase was made on St with 8 votes. Federal Reserve President James Bullard voted to increase it by 50 basis points.
Inflation is expected to return to the 2% target in a statement by the Federal Open Market Committee (FOMC) that it aims to achieve maximum employment and 2% inflation in the long run, and the labor market. Was pointed out to remain strong. Appropriate tightening of monetary policy stance.
The statement reported that it was decided to raise the federal funds rate to the range of 0.25 to 0.50 percent to support these goals, presuming that a continuous increase would be appropriate.
At its March meeting, the Fed decided to raise interest rates for the first time since 2018. The final rate hike by banks took place in November 2018 to end the expansionary monetary policy implemented after the global financial crisis.
In the first months of the Kovid-19 epidemic, the Fed, which cut its policy rate to 0-0.25%, began buying assets to support its economy.
The Federal Reserve’s balance sheet almost doubled during the pandemic, reaching nearly $ 9 trillion.
Rising inflation due to the rapid economic recovery forced federal officials to change monetary policy, but banks began slowing down asset purchases at a meeting last November, at a meeting in December. Asset purchase.
Inflation in the United States reached 7.9% annually in February, the highest level since 1982.
After a two-day FOMC meeting, the Fed said in a statement that economic activity and employment indicators remained strong.
“Inflation remains high, reflecting pandemic-related imbalances in supply and demand, high energy prices and widespread price pressure,” the statement said, with increased employment and a sharp drop in unemployment in recent months. I pointed out that I did. Evaluation was done.
The statement emphasized that Russia’s Ukrainian war caused humanitarian and economic difficulties: “The impact on the US economy is very uncertain, but in the short term, the occupation and related events will lead to inflation. The formula was used, creating more upward pressure and pressure on economic activity.
In a statement, the bank said it would begin reducing balance sheet bonds and mortgage-backed securities at its next meeting.
Evaluating the appropriate stance of monetary policy, emphasizing continued monitoring of the impact of information on the economic outlook, and responding to risks that may impede the achievement of goals. He said he would prepare for his stance. ..
According to the statement, the Commission’s assessment will take into account a wide range of information, including public health, labor market conditions, inflationary pressures and expectations, financial and international developments.
Six more interest rates are expected to increase this year
The Fed, which released economic forecasts, raised inflation forecasts while predicting that interest rates would rise another six-fold this year.
The median funding rate is projected by the Federal Government to be 0.9% to 1.9% in 2022, 1.6% to 2.8% in 2023, and 2.1% in 2024. It has been upgraded to 2.8. The long-term average interest rate forecast has been lowered from 2.5% to 2.4%.
Therefore, the Fed’s forecast shows that rate hikes will occur at each of the six FOMC meetings this year.
This year’s US economic growth forecast was lowered from 4% to 2.8%, while the 2023 US economic growth forecast was maintained at 2.2% and the 2024 growth forecast at 2%. The long-term growth expectation of the US economy has been determined to be 1.8%.
Increased inflation forecast
Inflation forecasts for this year have risen from 2.6% to 4.3%. Inflation forecasts have been raised from 2.3% to 2.7% in 2023 and from 2.1% to 2.3% in 2024.
The unemployment rate forecast remained at 3.5% this year and next year, but was raised from 3.5% to 3.6% in 2024.