The US Federal Reserve on 16 March raised interest rates for the first time since 2018. The U.S. central bank’s Federal Open Market Committee started tightening monetary policy with a quarter-percentage-point increase in the target federal funds rate, lifting that key benchmark from the current near-zero level.
Policymakers now see the federal funds rate rising to a range between 1.75% and 2% by the end of 2022. It is projected to climb to 2.8% next year – above the 2.4% level that officials now feel would work to slow the economy.
Speaking after the end of the latest two-day policy meeting, Fed Chair Jerome Powell said, “The way we’re thinking about this is that every meeting is a live meeting. We’re going to be looking at evolving conditions, and if we do conclude that it would be appropriate to move more quickly to remove accommodation, then we’ll do so.”
Fed policymakers marked down their GDP growth estimate for 2022 to 2.8%, from the 4% projected in December 2021.