Federal Reserve (Fed). Fed Announces Biggest Rate Hike since 1994

The Fed is picking up the pace of monetary tightening. After raising rates by 25 basis points in March and 50 points in May, it announced a 75-point hike today. It’s the biggest increase since November 1994. Despite these recent moves, rates still aren’t at restrictive levels. At 1.75%, the upper bound of the target range is still below the estimated neutral rate of 2.5%. And with inflation running north of 8%, real rates remain well in negative territory.