Fed Raises Interest Rates For First Time Since July 2023
(RTTNews) - For the first time since July of 2023, the Federal Reserve announced on Wednesday that it has decided to raise interest rates.
The Fed said it decided to raise the target range for the federal funds rate by 25 basis points to 3.75 to 4 percent in support of its dual mandate.
The vote to increase rates was unanimous following recent signs of division among Fed officials over the outlook for monetary policy.
In the accompanying statement, the Fed noted that inflation remains elevated and argued today's rate hike will support a timelier return to the central bank's 2 percent goal.
The Fed acknowledged uncertainty remains elevated due in part to geopolitical developments but said domestic spending has been resilient and the U.S. economy is expanding at a solid pace.
Along with the announcement of the Fed's latest monetary policy decision, officials also provided their latest projections for the economy and interest rates.
The projections show that a majority of Fed officials expect rates to be above 4 percent by the end of 2026, suggesting at least one more rate hike this year.
At the same time, Fed officials modestly increased their forecasts for both inflation and economic growth compared to their June forecasts.
The Fed's next monetary policy meeting is scheduled for October 27-28, while the final meeting of the year is set for December 8-9.
CME Group's FedWatch Tool is currently indicating a 57.4 percent chance the Fed will leave rates unchanged at the October meeting and a 42.2 percent chance of another quarter point rate hike.
