Fed Hints at Possible Slower Pace of Rate Increases; Fed Will Monitor Economic and Financial Developments

Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. 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. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective. tweet at 2:00pm: *FED RAISES BENCHMARK RATE 75 BPS TO 3.75%-4% TARGET RANGE tweet at 2:00pm: [DB] Fed Says Vote in Favor of Policy Was Unanimous: RTRS tweet at 2:00pm: FOMC STATEMENT COMPARISON https://t.co/1iVMuvEJRb tweet at 2:01pm: Fed Says It Anticipates Ongoing Interest Rate Increases Will Be Appropriate to Attain a ‘Sufficiently Restrictive’ Policy Stance to Return Inflation to 2% Over Time Fed Says Recent Indicators Point to Modest Growth in Spending and Production

tweet at 2:31pm: Fed’s Powell: Strongly Committed to Bringing Down Inflation Fed’s Powell: We Have Resolve Fed’s Powell: Without Price Stability, Will Not Achieve Sustained Strong Labor Market Fed’s Powell: We Are Moving Policy Stance Purposefully tweet at 2:32pm: Fed’s Powell: We Will Likely Need Restrictive Stance of Policy for Some Time Fed’s Powell: U.S. Economy Has Slowed Significantly From Last Year Fed’s Powell: Growth in Consumer Spending Has Slowed, in Part Due to Tighter Financial Conditions, Lower Real Incomes tweet at 2:33pm: Fed’s Powell: Activity in Housing Has Weakened Fed’s Powell: Slower Output Growth Also Weighing on Business Fixed Investment Fed’s Powell: Job Vacancies Still Very High Fed’s Powell: Labor Market Extremely Tight tweet at 2:34pm: [DB] Fed's Powell: Recent Inflation Data Has Come in Stronger Than Expected: RTRS tweet at 2:34pm: FED'S POWELL: INFLATION STILL WELL ABOVE OUR GOAL