Fed’s Move Ahead with the Second 75 Basis Point Interest Rate Hike

Ongoing efforts to achieve maximum employment and inflation at the rate of 2% over the longer run has prompted decisions by the Federal Open Market Committee (FOMC) to raise the target range for the federal funds rate 75 basis points to 2-1/4 to 2-1/2 percent. Decisions were partially based on robust job gains in recent months and the continued low unemployment rate, while spending and production have softened according to recent indicators as inflation remains elevated. Further creating additional upward pressure on inflation, along with weighing on global and economic activity is Russia’s ware against Ukraine. The FOMC will also continue to reduce its holdings on Treasury securities and agency debt and agency mortgage-backed securities; but “would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.”

Source:    https://www.federalreserve.gov/newsevents/pressreleases/monetary20220727a.htm