The Federal Reserve Open Market Committee (FOMC) released its decision on the federal funds rate earlier today and raised the rate by 25 bps to a range of 5.00-5.25%. The new range is now at the highest level since September 2007. Commentary indicated that inflation had moderated somewhat over the past few months but still remains elevated. Economic activity expanded, and the job market has remained resilient with record-low unemployment. Language from the release indicates that further rate hikes will be determined based on incoming economic data.
The FOMC is firmly committed to achieving full employment and price stabilization, with a target inflation rate of 2% over the longer term. Committee members continue to observe a wide range of economic factors and are prepared to adjust monetary policy if the attainment of the goals is jeopardized.
We will receive members’ updated expectations at the next FOMC meeting, which is scheduled for June 14-15.