FOMC Meeting: Key Takeaways
July FOMC meeting | July 27, 2022
The Federal Open Market Committee (FOMC) increased the federal funds rate by .75% (matching the 75-basis-point increase from the June meeting), to 2.25% – 2.50%. The Federal Reserve (Fed) expects ongoing increases to the federal funds rate. The committee will continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities in accordance with its statement released last May.
Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low.
Inflation remains elevated, reflecting supply and demand imbalances due to the pandemic, higher energy prices, and broader price pressures.
The Russia-Ukraine war is creating tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity.
The committee is highly attentive to inflation risks.
The committee seeks to achieve maximum employment and inflation at the rate of 2.0% over the longer term. In support of these goals, the committee anticipates that ongoing increases in the target range will be appropriate.
While additional Fed rate hikes are expected, the Fed is leaving its options open as to the magnitude of future hikes and remains dependent on incoming data.
As long as inflation pressure remains elevated, it is our belief that the Fed will continue to raise rates even as the economy softens.
The vote in favor of the Fed action was unanimous.
|Upcoming Meeting Schedule||
September 21* | November 2 | December 14* | February 1
*Indicates the meeting is associated with a summary of economic projections. In addition, every meeting will be accompanied by a press conference.
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