The Federal Reserve Increases Another 75 Points, but Could Soon Slow the Pace of Hikes

The Fed decided to raise the target range for the federal funds rate by 0.75%. It is now in a range of 3.75% to 4.00%. The Fed anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time. In determining the pace of future increases in the target range, the Fed will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. The Fed remains committed to curbing inflation. We therefore expect further rate hikes in the coming months, though the pace of those increases should slow as inflation and economic growth cool.