2023-6-15 21:20 |
At its June meeting, the Federal Open Market Committee unanimously decided to maintain the federal funds rate between 5% and 5.25%.
This decision becomes effective June 15, and marks a pause in the Federal Reserve’s trend of rate hikes.
Further monetary policy decisions include standing overnight repurchase agreement operations with a minimum bid rate of 5.25% and an aggregate operation limit of $500 billion. Also included are standing overnight reverse repurchase agreement operations at an offering rate of 5.05%, with a per-counterparty limit of $160 billion per day.
In a related move, the Federal Reserve decided to hold the primary credit rate at the existing level of 5.25%.
These decisions are part of a broader strategy to manage inflation and stimulate economic growth.
Comments on economy and inflationThe Federal Reserve underscored that the U.S. banking system is sound and resilient. Nonetheless, tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.
The Committee continues to aim for maximum employment and inflation at the rate of 2% over the longer run.
In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, 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.
Economic projectionsIn the summary of economic projections provided by the Federal Reserve, the FOMC’s median federal funds rate expectation for the end of 2023 was revised up to 5.6% from 5.1% in the previous projections. This suggests another 50 basis points of rate hikes in 2023.
For the end of 2024, the median federal funds rate expectation was adjusted upward to 4.6% from 4.3% previously, and the 2025 estimate was revised higher to 3.4% from 3.1%.
The post Fed cools interest rate hikes at June FOMC meeting appeared first on CryptoSlate.
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