JABAR EKSPRES – The US Federal Reserve on Wednesday (6/14/2023) kept the target range for the federal funds rate unchanged at 5.0 percent to 5.25 percent, following a string of 10 consecutive hikes since March 2022.
“Holding the target range steady at this meeting allowed the committee to assess additional information and its implications for monetary policy,” the Federal Open Market Committee (FOMC) said in a statement issued on Wednesday (6/14/2023) afternoon, after concluding its latest two-day policy meeting.
The pause in interest rate hikes was expected as the year-on-year growth rate of the US consumer price index slowed to 4.0 percent in May, from a peak of 9.1 percent in June 2022.
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The Federal Reserve reiterated that it is strongly committed to returning inflation to its 2.0 percent target and will continue to reduce its holdings of government debt securities, agency debt, and mortgage-backed securities as planned.
To tame inflation, the Fed has undertaken aggressive monetary tightening through an accumulative 500 basis points increase in the federal funds rate.
Notably, monetary policymakers from the Fed raised the federal funds rate projection for 2023 to 5.6 percent from 5.1 percent in March, indicating that the Fed may resume rate hikes after the pause.
They raised their core personal consumption expenditure inflation forecast for 2023 to 3.9 percent, up from 3.6 percent in March, according to a summary of economic projections issued by the FOMC.
Meanwhile, the projection for real GDP growth in 2023 rose to 1.0 percent in 2023 from the previous expectation of 0.4 percent, and the forecast for the unemployment rate in 2023 fell to 4.1 percent from 4.5 percent in March.
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