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First Fed Rate Hike Since 2018.

London, Wednesday, 16 March 2022

During its March 2022 meeting, the Fed raised the fed funds rate target by a quarter-point to 0.25 percent -0.5 percent, in accordance with market forecasts. It's the first time borrowing costs have risen since 2018.

At a future meeting, officials are expected to begin reducing their holdings of Treasury securities, agency debt, and agency mortgage-backed securities.

The Fed now expects to raise rates at each of its remaining six meetings this year, with the fed funds rate reaching 1.9 percent by the end of the year.

Inflation is expected to spike to 4.3 percent in 2022 (up from 2.6 percent in December), with the economy increasing at 2.8 percent this year, well below the 4 percent predicted in December.

The impact of the crisis in Ukraine on the US economy is very unpredictable, according to the central bank, but it is expected to put extra upward pressure on inflation and stifle economic activity.

Source: Federal Reserve // (Edited by: The Decision Maker)


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