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WASHINGTON, DC – MAY 03: Federal Reserve Board Chairman Jerome Powell delivers remarks at a news conference following a Federal Open Market Committee meeting on May 3, 2023 in Washington, DC. The Federal Reserve announced a 0.25 percentage point interest rate increase bringing the key federal funds rate to more than 5%, a 16-year high. (Photo by Anna Moneymaker/Getty Images) (Photo by Anna Moneymaker/Getty Images)
Anna Moneymaker | Getty Images News | Getty Images
The Federal Reserve paused its hiking campaign in June, but forecast it will raise interest rates as high as 5.6% before 2023 is over, according to the central bank’s projections released on Wednesday.
The Fed on Wednesday kept the key borrowing rate in a target range of 5%-5.25%. But it was its projections, the so-called dot-plot, that moved markets, sending them lower as the central bank projected two more increases. That’s if the central bank keeps its rate-hiking pace at quarter-point increments.
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Here are the Fed’s latest targets:
Eighteen members of the Federal Open Market Committee indicated their expectations for rates in 2023 and further out in the dot plot. Four members saw one more rate increase this year and nine expect two. Two more members added a third hike while one saw four more. Only two members signaled that they don’t see more hikes this year.
The central bank also hiked their forecasts for the next two years, now projecting a fed funds rate of 4.6% in 2024 and 3.4% in 2025. That’s up from respective forecasts of 4.3% and 3.1% previously.
This is breaking news. Please check back for updates.
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