The US Federal Reserve announced the results of its September interest rate meeting in the early hours of today (22nd) Hong Kong time. Officials decided to raise interest rates by 0.75% to a range of 3 to 3.25%. The interest rate level was the highest since 2008, which was in line with market expectations. Local inflation fell to 2%.
The bureau's economic outlook predicts that interest rates will increase to 4.4% this year and 4.6% next year, higher than the 3.4% and 3.8% predicted in June.
The three major U.S. stock indexes immediately turned from up to down.
The Fed said in a statement that recent indicators point to moderate growth in spending and production, with job growth solid in recent months and unemployment remaining low.
Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, high food and energy prices and widespread price pressures.
The war between Russia and Ukraine has caused severe humanitarian and economic hardship, and the war and related events have put additional pressure on rising inflation, hitting global economic activity.
The Committee is highly concerned about inflation risks.
In order to achieve the highest employment rate and keep inflation low, the committee decided that the federal funds rate would be 3% to 3.25%, and that it was appropriate to continue raising interest rates.
In addition, the committee will continue to reduce its holdings of Treasuries and mortgage-backed securities as planned in May.
The Committee is strongly determined to return inflation to 2%.
Expected to raise interest rates to 4.6% by the end of 2023
The dot plot shows that the Fed may raise interest rates to 4.4% by the end of this year and 4.6% by the end of next year, which is much higher than the forecast in June.
In addition, the Federal Reserve lowered this year's gross domestic product (GDP) growth from 1.7% to 0.2%, the unemployment rate from 3.7% to 3.8%, and the PCE from 5.2% to 5.4%.
In the coming year, the GDP was lowered from 1.7% to 1.2%, the unemployment rate was raised from 3.9% to 4.4%, and the PCE was raised from 2.6% to 2.8%.
Inflation is not expected to reach around 2% until 2025.
Federal Reserve Chairman Jerome Powell told a news conference that there is little data showing that the labor market is cooling and that he would like to see inflation return to 2 percent.
On the eve of the Fed's interest rate hike, many banks increased their fixed deposit rates. Furong's one-year fixed deposit rate rose to 3.3%. Situation Strict capital requirements pose risks ECB expected to raise interest rates several times Germany warns of recession next quarter