The Federal Reserve delivered its third straight interest rate increase of three-quarters of a percentage point and signaled a high likelihood of another rate hike by the end of the year
The United States has had a "red hot housing market ... There was a big imbalance," Powell said in a news conference after Fed policymakers unanimously agreed to raise the central bank's benchmark overnight interest rate to a range of 3.00%-3.25%. "What we need is supply and demand to get better aligned ... We probably in the housing market have to go through a correction to get back to that place.
"The committee is strongly committed to returning inflation to its 2% objective," the central bank's rate-setting Federal Open Market Committee said in its policy statement after the end of a two-day policy meeting.GROWTH SLOWDOWNU.S. Federal Reserve Board Chairman Jerome Powell holds a news conference after Federal Reserve raised its target interest rate by three-quarters of a percentage point in Washington, U.S., September 21, 2022.
Inflation by the Fed's preferred measure has been running at more than three times the central bank's target. The new projections put it on a slow path back to 2% in 2025, an extended Fed battle to quell the highest bout of inflation since the 1980s, and one that potentially pushes the economy to the borderline of a recession.
U.S. stocks, already mired in a bear market over concerns about the Fed's monetary policy tightening, ended the day sharply lower, with the S&P 500In the U.S. Treasury market, which plays a key role in the transmission of Fed policy decisions into the real economy, yields on the 2-year note vaulted over the 4% mark, their highest levels since 2007.
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