Federal Reserve Boosts Federal Funds Rate for Seventh Time in 2022



The Federal Reserve announced that it will raise the target range for the federal funds rate to between 4.25% and 4.5% on Wednesday, marking a 0.5% increase and the seventh overall increase this year. According to CNBC, this action brought the “benchmark interest rate to the highest level in 15 years.”

In June, the Fed increased the federal funds rate to a range between 1.5% and 1.75%, which, according to Yahoo Finance, was “the largest move [the Fed] has made in a single meeting since 1994.” The Fed then followed up with an increase of the same magnitude in July, increasing the target range to 2.25% to 2.5%, followed by another 0.75% increase in late September and yet another in November.

“The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” the Fed said in a statement. “In determining the pace of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”


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