U.S. Federal Reserve Keeps Interest Rates Unchanged at 5%-5.25% with Expectations of Two More Hikes by Year End

The U.S. Federal Reserve (Fed) announced its June interest rate decision on Wednesday (14th). The federal funds rate remained unchanged at 5%-5.25%. , officials expect two more rate hikes by the end of the year.

The post-meeting statement pointed out: “This meeting maintains the target range unchanged, allowing the committee to assess more information and the impact of interest rate hikes.” The Fed’s next meeting will be held on July 25-26.

Long before the central bank’s decision, the market generally expected the Fed to “skip interest rate hikes” this time, so the focus was mostly on the Federal Open Market Committee’s (FOMC) interest rate dot plot, which revealed officials’ views on future interest rates. trend forecast.

According to the latest dot plot, half of the 18 FOMC members predict that the interest rate will fall in the range of 5.5%-5.75% at the end of the year, and the median interest rate is 5.6%, which means that the remaining four meetings of this year may rise again interest twice. Two other members forecast no rate hike this year, four forecast one rate hike and three forecast at least three.

The FOMC also adjusted its interest rate forecasts for the next few years, with the current median forecasts for 2024 and 2025 being 4.6% and 3.4%, respectively, higher than the 4.3% and 3.1% given in the March Summary of Economic Projections (SEP).

At the same time, the committee adjusted its economic growth forecast. It now expects that the annual gross domestic product (GDP) will grow by 1%, which is higher than the 0.4% forecast in March. It is also more optimistic about the job market. , lower than the 4.5% forecast in March.

In terms of inflation, the core personal consumption expenditures price index (PCE) excluding food and energy prices this year was raised to 3.9% from the previous forecast of 3.6%, and the overall PCE forecast was slightly lowered from 3.3% to 3.2%.

Major U.S. stock indexes opened lower on Wednesday morning, except forDowBesides, S&P,that fingerandfee halfThen it turned from black to red. After the release of the interest rate decision,DowThe midday decline extended to 300 points, and the rest of the indices fell sharply in the short term.