The US Federal Reserve (Fed) increased the policy rate by 75 basis points in line with market expectations.
The US Federal Reserve (Fed) increased the policy rate by 75 basis points to the range of 3-3.25 percent.
It was announced that the decision was taken unanimously. In the text of the resolution, the direction that it would be appropriate to continue interest rate increases in the upcoming meetings was used again.
Fed officials’ interest rate expectation for this year is 4.4 percent; For the end of 2023, it was recorded as 4.6 percent. This expectation pointed out that a 75 basis point rate hike was also on the table at the November meeting.
Along with the interest rate decision, the Fed’s projections for economic data were also published. Accordingly, the PCE inflation expectation, which is the inflation indicator followed by the Fed, was increased from 5.2 percent to 5.4 percent for 2022. The 2023 expectation regarding this data was also increased from 2.6 percent to 2.8 percent.
The Fed also raised its expectations for unemployment. In the projections of the Fed, the unemployment expectation in the USA in 2022 increased from 3.7 percent to 3.8 percent according to the projections made in June. The unemployment expectation for 2023 was increased from 3.9 percent to 4.4 percent.