Market Updates
Fed Hikes Rates by 75 Basis Points, May Slow Future Pace
Brian Turner
02 Nov, 2022
New York City
The Federal Reserve lifted its key lending rate range by 75 basis points as widely expected.
In an unanimous decision, the committee voted to lift the fed funds rate range to 3.25% to 4%.
The central bank lifted its target range for the sixth time in a row and lifted rates by 75 basis points for the fourth time in a row.
The new fed funds rate range is the highest since 2008.
Investors looking for any future rate path increase clues were disappointed after the language in the policy statement did not provide additional insights.
The statement released after the policymakers meeting reiterated the Fed's commitment in lowering inflation to its target range of 2%.
The accompanied statement left a door open for the Fed to lift rate at a slower pace if needed
"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," the Fed's announcement noted.
The Fed's statement also confirmed it is on track to reduce Treasury Securities holdings as announced in May.
Despite the multiple rate hikes, inflation has remained stubbornly high and is well anchored in the economy.
The Fed's preferred measure of inflation jumped 6.2% in September and advanced 5.1% excluding food and energy.
GDP declined in the first two quarters of 2022 but rebounded at 2.6% annual rate in the third quarter, driven by higher exports.
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