The Federal Open Market Committee (FOMC) raised the target range for the federal funds rate by 0.50 percentage points at its December meeting, bringing it to 4.25 to 4.50 percent.
In its meeting statement, the FOMC said it 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. It also said the pace of future increases will be determined by taking 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 policy statement reiterated that inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. It said Russia’s war against Ukraine and related events are contributing to upward pressure on inflation and are weighing on global economic activity. The policy statement also reaffirmed that the FOMC is highly attentive to inflation risks and strongly committed to returning inflation to its 2 percent objective.
In addition to raising the policy rate, the FOMC said it will continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet.
The FOMC also said it will continue to monitor a wide range of incoming information to assess the appropriate stance of monetary policy, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
What does this mean for you? Let’s rewind.
December 2022 FOMC Rewind
You may also be interested in:
The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.