Federal Reserve Raises Key Interest Rate by 0.25% to 4.75%-5.00%
The Federal Reserve raised the federal funds target range by 0.25% to 4.75% to 5.00%. The decision was unanimous. The terminal rate projection remained unchanged at 5.10%
Fed officials forecast another quarter point in rate hikes this year to a peak range of 5.00% to 5.25%, in line with its December estimate and lower than the level markets anticipated before Silicon Valley Bank’s collapse.
“The US bank system remains sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses. Those tighter credit conditions will weigh on economic activity, hiring and inflation. The extent of these effects is uncertain,” according to the Fed’s statement.
“The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” it added.
