The Federal Open Market Committee raised the target range for its short-term policy rate, the federal funds rate, by half a percentage point at its May 2022 meeting. In its post-meeting statement, the Committee said that inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.
The Committee said it is keeping a close watch on other risks to inflation. The implications for the U.S. economy from the situation in Ukraine are highly uncertain and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions.
In working toward its goal of 2% inflation on average, along with raising the federal funds rate, the Committee announced its plan to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
Regarding current conditions, the Fed noted that, although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the unemployment rate has declined substantially.
What does this mean for you? Let’s rewind.
May 2022 FOMC Rewind
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