The first rate hike since December 2018… It will rise six more times this year. US Central Bank Federal Reserve System Washington Headquarters© AFP=News1
Reporter Shin Ki-rim = The U.S. central banks Federal Reserve raised interest rates for the first time in more than three years. Interest rates are expected to rise six more times at each monetary policy meeting remaining this year.
The Feds monetary policy-making body, the Federal Open Market Committee, raised interest rates for the first time since December 2018 after a two-day meeting. The interest rate, which was at the zero level, rose by 25 basis points to 0.25% to 0.5%. For the rest of this year, interest rates will rise six more times, 150 basis points.
The dot chart showing interest rate forecasts pointed to 7 hikes in 2022 this year and 3 hikes in 2023 next year. In the case of 2024, interest rates are expected to remain frozen. The base rate will rise to 1.9% by the end of this year. Compared to the dot plot in December of last year, it has become much more hawkish. Three months ago, interest rate hikes were expected three times this year.
The FOMC said in a statement that it expects it to be appropriate to continue raising its target range. because of inflation. In the economic outlook, the core inflation forecast for this year was 4.1%, which was raised by 1.4%p from 2.7% in December. Next years inflation will rise from 2.3% to 2.6%, and next years inflation will rise from 2.1% to 2.3%, respectively.
The growth rate forecast was drastically lowered from 4.0% this year to 2.8%, and it was frozen at 2.2% and 2.0% for next year and the year after that. The unemployment rate remained at the previous 3.5% for both this year and next year, and the unemployment rate for next year rose slightly from 3.5% to 3.6%.