The Federal Reserve delivered its third straight interest rate increase of three-quarters of a percentage point, with the U.S. central bank's chief Jerome Powell vowing that officials would not let up in their battle to contain inflation
- and new projections showed the policy rate rising to between 4.25%-4.50% by the end of this year before topping out at 4.50%-4.75% in 2023.
Inflation by the Fed's preferred measure has been running at more than three times the central bank's 2% target.slowing to a crawl in 2022, with year-end growth of 0.2%, rising to 1.2% in 2023, well below the economy's potential. The unemployment rate, currently at 3.7%, is projected to rise to 3.8% this year and to 4.4% in 2023.
The federal funds rate projected for the end of this year signals another 1.25 percentage points in rate hikes to come in the Fed's two remaining policy meetings in 2022, a level that implies another 75-basis-point increase in the offing. The Fed "anticipates that ongoing increases in the target range will be appropriate," the statement said, repeating language from its previous statement in July. The policy decision on Wednesday was unanimous.The updated projections point to an extended Fed battle to quell the highest bout of inflation since the 1980s, and one that potentially pushes the economy at least to the borderline of a recession.
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