As widely expected, the Federal Reserve raised the overnight Fed Funds rate by 0.25%, or 25 basis points (BPS) to a range of 5% to 5.25%. It was the 10th interest rate hike since last March, for a total increase of 5.0%, the most aggressive pace in the modern era (when the Fed has used the Fed Funds rate as its primary tool for influencing the economy).
The accompanying statement made an important change from the most recent one.
At the previous meeting, the statement read:
- “The Committee anticipates that some additional policy firming may be appropriate to return inflation to 2 percent over time”.
But the May 3rd statement read:
- “In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time….”
To read Dan's full report, click on the link below and download the PDF
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