Continuing its tightening of financial conditions to bring the rate of inflation lower, the Federal Reserve’s monetary policy committee raised the federal funds target rate by 75 basis points, increasing that target to an upper bound of 2.5%. This move matches the June rate hike as the largest increase for the funds rate since 1994….
To fight persistent inflation, the Federal Reserve has committed to significantly cooling demand. This approach reflects a non-monetary policy failure to fix underlying supply-side challenges that are pushing up inflation. The Fed lacks policy tools to make these supply-side fixes, so it must rely on demand-side impacts to bring down inflation by reducing economic growth….
Following a 25 basis points increase in March, the Federal Reserve’s monetary policy committee unanimously approved a further 50 basis points increase for the federal funds target rate, the largest increase for the rate in more than two decades. The Fed also provided details for its plan to reduce its balance sheet (quantitative tightening), which…
The first of many expected Federal Reserve hikes of the short-term federal funds rate was announced today. Combined with future balance sheet runoff, these monetary policy moves will lead to higher mortgage rates in 2022 and 2023 as the Fed attempts to curb elevated inflation. As widely expected by forecasters and markets, the Fed raised…
At the conclusion of its January policy meeting, the Federal Open Market Committee strongly signaled that it will undertake its first, post-covid increase of the federal funds rate in March. The Fed is tightening monetary policy in response to the highest inflation readings in nearly 40 years. These inflationary pressures have increased both consumer costs…
