The Federal Reserve Open Market Committee (FOMC) announced yesterday their decision to raise the federal funds rate by 50 bps to a range of 4.25-4.50%. Similar to prior news releases, commentary focused on elevated inflation due to continued supply and demand disruptions, higher energy prices and broader price pressures. However, economic indicators have pointed to modest growth in spending and production as well as a relatively low unemployment rate.
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.
The Federal Reserve Dot Plot below is the graphical representation of each committee member’s interest rate outlook, which currently points to further increases.
We will get updated expectations at the next FOMC meeting, which is scheduled for January 31 and February 1.
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