Surprising no one, the Federal Open Market Committee (FOMC) voted to hike its policy rate by 75 basis points (bps; 100 bps equal 1.00%) to a range of 3.75% to 4.00%.
The Federal Open Market Committee just hiked its federal funds rate target another 75 basis points (bps; 100 bps equal 1.00%), to a range between 3.00% and 3.25%. Hiking rates aggressively is risky when housing is already struggling and when what the Federal Reserve (Fed) does today might not be fully felt for dozens of months into the future.
The old saying is that “talk is cheap.” It certainly isn’t if you’re a central banker. Investors hang on a central banker’s every word. Whether the Federal Reserve (Fed) hikes by 75 basis points (bps; 100 bps equal 1.00%) or 50 bps is probably less relevant than what Fed officials say with their Summary of Economic Projections (their guesses about what they’ll do in the future and how the economy may evolve).
Federal Reserve (Fed) Chair Jerome Powell gave a short and sweet speech at the Jackson Hole Economic Symposium on August 25, but the market took it as being brief and bitter. Since then, the Institute for Supply Management released its manufacturing and services indexes. Manufacturing activity has moderated, and services activity has been shockingly strong.
The Federal Open Market Committee (FOMC) hiked its federal funds rate target by 0.75% at its July meeting, as expected.
On Wednesday, June 15, the Federal Open Market Committee (FOMC) raised the federal funds rate by 75 basis points (bps; 100 bps equal 1.00%) to a new range of 1.50%‒1.75% by a vote of 10-1—an outcome that was very far from consensus as recently as Friday, June 10.
On Wednesday, the Federal Open Market Committee (FOMC) raised the federal funds rate by 50 basis points (bps; 100 bps equal 1.00%) to a new range of 0.75%‒1.00%. This was widely expected by the market, and the vote was 10-0.
Brian Jacobsen provides perspective on the Russia-Ukraine conflict and other key topics of the current week—plus, his thoughts about what the week ahead may hold. Here’s his report for the week of March 12–18, 2022.
The Federal Reserve (Fed) and the money markets seem to agree that it’s time for the Fed to shore up its inflation-fighting credentials. As economic data continued to come in hot over the past few months — showing a tight labor market and inflation not seen for generations — the prospect of accommodation removal in its various forms moved from a distant event to one likely to begin soon. The Fed has signaled it will raise rates at its March meeting; the main question over the past month or so has been whether the first increase would be 25 basis points (bps; 100 bps equal 1.00%) or 50 bps.
In August 2020, the Federal Reserve (Fed) laid out its objective of flexible average inflation targeting. At the time, the trailing one-year rate of inflation was 1.3% and the trailing five-year rate was 1.7%. After years of undershooting its inflation target, the Fed said it wanted to overshoot its target to bring the average rate of inflation up to target.