Federal Reserve Boosts Interest Rates, Says ‘Inflation Has Eased Somewhat’
FEB 2, 2023 - 7:10 am
The Federal Reserve announced that it will raise the target range for the federal funds rate to between 4.5% and 4.75% on Wednesday, marking a quarter point increase. The move was less drastic than its seven rate increases in 2022, with all but one of those lifting rates by three quarters of a point. While the Fed’s latest action may be less intense than many of its increases last year, it still said it “anticipates that ongoing increases in the target range will be appropriate.”
Last June, the Fed began its efforts to curb rising inflation by increasing 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 Fed then increased rates for a seventh time in December, although by half a point instead of the three quarters of a point increases it issued in the other actions throughout the year.
“Recent indicators point to modest growth in spending and production,” the Fed said in a statement. “Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation has eased somewhat but remains elevated.”
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