Fed to hold two-day FOMC March meeting on 15-16
Inflation forecast for this year raised from 2.6% to 4.3%
[New York = E-Daily Correspondent Kim Jong-nam] The US Federal Reserve has hinted at raising interest rates seven times this year. The inflation forecast for this year has been raised to 4.3% from the original 2.6%.
According to the economic forecasts and dot charts released after the Federal Open Market Committee held a regular meeting on the 15th and 16th, five out of 16 FOMC members expected to raise interest rates seven times this year. The most members predicted the 7th raise. At the time of the meeting in December of last year, it was inclined to raise three times this year, but it increased dramatically in just three months.
The Fed announced today that it would raise the benchmark interest rate by 0.25 percentage points to 0.25-0.50%. Assuming that it is raised by 0.25 percentage points, this is the speed at which it can raise at every six FOMC meetings remaining this year. The possibility of a “big step” of raising 0.50 percentage points at a time is not small.
In addition, there were 5 members each who raised the 9th and 6th raises this year. One committee member suggested that the rate should be raised to 3.00-3.25% this year.
For next year, opinions differed somewhat. There were 4 members who predicted the 2.25~2.50% level the most, but the members who said that the interest rate should be raised above that level were also diversely distributed.
The Federal Reserve also raised its forecast for US personal consumption inflation inflation this year to 4.3% from 2.6% three months ago. The reason for the sharp tightening is inflation. In particular, it is noteworthy because it is a prediction that was made during the recent surge in raw material prices due to the recent war in Ukraine. For next year, it will be raised from 2.3% to 2.7%.
The Fed also lowered its real GDP growth forecast for this year from 4.0% to 2.8%.