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    how many times has the us central bank increased interest rates so far in 2022?

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    Fed rate hike September 2022: Rates raised by three

    The Federal Reserve concluded its two-day meeting Wednesday, with markets widely expecting a 0.75 percentage point interest rate increase.

    SKIP NAVIGATION FEDERAL RESERVE

    Fed raises rates by another three-quarters of a percentage point, pledges more hikes to fight inflation

    PUBLISHED WED, SEP 21 20222:00 PM EDTUPDATED WED, SEP 21 20224:13 PM EDT

    Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM WATCH LIVE KEY POINTS

    The Federal Reserve raised benchmark interest rates by another three-quarters of a percentage point and indicated it will keep hiking well above the current level.

    The central bank has been looking to bring down inflation, which is running near its highest levels since the early 1980s.

    Fed officials signaled the intention of continuing to hike until the funds level hits a “terminal rate,” or end point, of 4.6% in 2023. That implies a quarter-point rate rise next year but no decreases.

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    Fed raises rates by 75 basis points to fight inflation

    The Federal Reserve on Wednesday raised benchmark interest rates by another three-quarters of a percentage point and indicated it will keep hiking well above the current level.

    In its quest to bring down inflation running near its highest levels since the early 1980s, the central bank took its federal funds rate up to a range of 3%-3.25%, the highest it has been since early 2008, following the third consecutive 0.75 percentage point move.

    Stocks seesawed following the announcement, with the Dow Jones Industrial Average most recently down slightly. The market swung as Fed Chairman Jerome Powell discussed the outlook for interest rates and the economy.

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    Traders have been concerned that the Fed is remaining more hawkish for longer than some had anticipated. Projections from the meeting indicated that the Fed expects to raise rates by at least 1.25 percentage points in its two remaining meetings this year.

    ‘Main message has not changed’

    “My main message has not changed since Jackson Hole,” Powell said in his post-meeting news conference, referring to his policy speech at the Fed’s annual symposium in August in Wyoming. “The FOMC is strongly resolved to bring inflation down to 2%, and we will keep at it until the job is done.”

    The increases that started in March — and from a point of near-zero — mark the most aggressive Fed tightening since it started using the overnight funds rate as its principal policy tool in 1990. The only comparison was in 1994, when the Fed hiked a total of 2.25 percentage points; it would begin cutting rates by July of the following year.

    Along with the massive rate increases, Fed officials signaled the intention of continuing to hike until the funds level hits a “terminal rate,” or end point, of 4.6% in 2023. That implies a quarter-point rate hike next year but no decreases.

    The “dot plot” of individual members’ expectations doesn’t point to rate cuts until 2024. Powell and his colleagues have emphasized in recent weeks that it is unlikely rate cuts will happen next year, as the market had been pricing.

    Federal Open Market Committee members indicate they expect the rate hikes to have consequences. The funds rate on its face addresses the rates that banks charge each other for overnight lending, but it bleeds through to many consumer adjustable-rate debt instruments, such as home equity loans, credit cards and auto financing.

    In their quarterly updates of estimates for rates and economic data, officials coalesced around expectations for the unemployment rate to rise to 4.4% by next year from its current 3.7%. Increases of that magnitude often are accompanied by recessions.

    Along with that, they see GDP growth slowing to 0.2% for 2022, rising slightly in the following years to a longer-term rate of just 1.8%. The revised forecast is a sharp cut from the 1.7% estimate in June and comes following two consecutive quarters of negative growth, a commonly accepted definition of recession.

    Powell conceded a recession is possible, particularly if the Fed has to keep tightening aggressively.

    “No one knows whether this process will lead to a recession or, if so, how significant that recession will be,” he said.

    The hikes also come with the hopes that headline inflation will drift down to 5.4% this year, as measured by the Fed’s preferred personal consumption expenditures price index, which showed inflation at 6.3% in July. The summary of economic projections then sees inflation falling back to the Fed’s 2% goal by 2025.

    Core inflation excluding food and energy is expected to decline to 4.5% this year, little changed from the current 4.6% level, before ultimately falling to 2.1% by 2025. (The PCE reading has been running well below the consumer price index.)

    The reduction in economic growth came even though the FOMC’s statement massaged language that in July had described spending and production as having “softened.” This meeting’s statement noted: “Recent indicators point to modest growth in spending and production.” Those were the only changes in a statement that received unanimous approval.

    स्रोत : www.cnbc.com

    Fed delivers another big rate hike; Powell vows to 'keep at it'

    Federal Reserve Chair Jerome Powell vowed that he and his fellow policymakers would keep at their battle to beat down inflation, as the central bank hiked interest rates by three-quarters of a percentage point for a third straight time and signaled that borrowing costs would keep rising this year.

    September 22, 20229:25 AM UTC

    Last Updated 2 hours ago

    Fed delivers another big rate hike; Powell vows to 'keep at it'

    By Howard Schneider and Ann Saphir

    5 minute read

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    Summary Companies

    Fed lifts target interest rate to 3.00%-3.25% range

    Forecasts show another large hike likely by end of year

    Powell: No 'painless' way to bring down inflation

    WASHINGTON, Sept 21 (Reuters) - Federal Reserve Chair Jerome Powell vowed on Wednesday that he and his fellow policymakers would "keep at" their battle to beat down inflation, as the U.S. central bank hiked interest rates by three-quarters of a percentage point for a third straight time and signaled that borrowing costs would keep rising this year.

    In a sobering new set of projections, the Fed foresees its policy rate rising at a faster pace and to a higher level than expected, the economy slowing to a crawl, and unemployment rising to a degree historically associated with recessions.

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    Powell was blunt about the "pain" to come, citing rising joblessness and singling out the housing market, a persistent source of rising consumer inflation, as being likely in need of a "correction." read more

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    Earlier on Wednesday, the National Association of Realtors reported that U.S. existing home sales dropped for a seventh straight month in August. read more

    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."

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    That theme, of a continuing mismatch between U.S. demand for goods and services and the ability of the country to produce or import them, ran through a briefing in which Powell stuck with the hawkish tone set during his remarks last month at the Jackson Hole central banking conference in Wyoming.

    Recent inflation data has shown little to no improvement despite the Fed's aggressive tightening - it also announced 75-basis-point rate hikes in June and July - and the labor market remains robust with wages increasing as well.

    Reuters Graphics

    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.

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    "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.

    The Fed "anticipates that ongoing increases in the target range will be appropriate."

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    U.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. REUTERS/Kevin Lamarque

    The Fed's target policy rate is now at its highest level since 2008 - and new projections show it rising to the 4.25%-4.50% range by the end of this year and ending 2023 at 4.50%-4.75%.

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    Powell said the indicated path of rates showed the Fed was "strongly resolved" to bring down inflation from the highest levels in four decades and that officials would "keep at it until the job is done" even at the risk of unemployment rising and growth slowing to a stall.

    "We have got to get inflation behind us," Powell told reporters. "I wish there were a painless way to do that. There isn't."

    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.

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    The Fed said that "recent indicators point to modest growth in spending and production," but the new projections put year-end economic growth for 2022 at 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. That would be above the half-percentage-point rise in unemployment that has been associated with past recessions.

    स्रोत : www.reuters.com

    Interest rates are going up as the Fed battles stubborn inflation : NPR

    The Federal Reserve raised interest rates by another 0.75 percentage points today, as it tries to control runaway prices. The central bank also signaled that additional rate hikes are likely.

    Economy

    Fed orders another super-sized interest rate hike as it battles stubborn inflation

    Updated September 21, 20223:34 PM ET

    Heard on All Things Considered

    SCOTT HORSLEY Twitter 4-Minute Listen

    Renovations continue on the Marriner S. Eccles Federal Reserve Board Building on September 19, 2022 in Washington, DC. The Federal Open Market Committee (FOMC) concluded its two-day meeting on interest rates this afternoon.

    Kevin Dietsch/Getty Images

    The Federal Reserve ordered another super-sized jump in interest rates today, and signaled that additional rate hikes are likely in the coming months, as it tries to put the brakes on runaway prices.

    The central bank raised its benchmark interest rate by 0.75 percentage points Wednesday, matching hikes in June and July. The Fed has been boosting borrowing costs at the fastest pace in decades. But so far, its actions have done little to curb the rapid run-up in prices.

    The annual inflation rate in August was 8.3% — down only slightly from the month before. While the price of gasoline has dropped sharply from its record high in June, and used cars and airline tickets have gotten somewhat cheaper, other costs — including rent, groceries and electricity — continue to climb.

    "My colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power," Fed chairman Jerome Powell told reporters, "especially for those least able to meet the higher cost of essentials."

    What's more, price hikes have begun to spread to goods and services that are not directly affected by the pandemic or the war in Ukraine, suggesting that inflation has gained momentum that may not be quickly reversed.

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    Sending a 'tough love' message on interest rates

    "Inflation is still running hot and is not easing as fast as expected," said Greg McBride, chief financial analyst for Bankrate.com. "The Fed has been delivering a 'tough love' message that interest rates will be higher, and for longer, than expected."

    The central bank has raised its benchmark rate five times this year — from near zero to 3.125%. On average, Fed policymakers think rates will climb to about 4.4% by the end of this year and 4.6% by the end of next year.

    By making it more expensive to buy a car, get a mortgage or use a credit card, the Fed hopes to tamp down consumer demand, which has been outstripping supply and pushing prices higher.

    "If we don't get inflation down, we're in trouble," Fed governor Christopher Waller said this month. "So that's the number one job."

    The housing market is feeling the effects. Mortgage rates have soared to the highest level since 2008, while sales of existing homes have dropped in each of the last seven months. Falling home sales also cuts demand for things like furniture and appliances.

    Overall consumer spending remains strong, however, so Fed policymakers will continue to tighten the screws.

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    "The Fed will continue to hike rates until it actually restrains the economy and intends to keep rates at those restrictive levels until inflation is unmistakably on its way to 2%," McBride said.

    Doing whatever it takes to get inflation under control

    The prospect that interest rates will stay higher for longer has rattled investors in recent weeks, producing big swings on Wall Street.

    Fed policymakers now expect significantly slower economic growth this year than they did in June, as well as slightly higher unemployment. But they've stressed their willingness to do whatever it takes to get inflation under control.

    "No one knows whether this process will lead to a recession or, if so, how significant that recession would be," Powell said. "Nonetheless, we're committed to getting inflation back down to 2%, because we think that a failure to restore price stability would mean far greater pain later on."

    With unemployment near a 50-year low at 3.7% and businesses adding hundreds of thousands of jobs each month, Waller argues the Fed can afford to take a hard line on prices.

    "If unemployment were to stay under, say 5%, I think we could really be really aggressive on inflation," he said. "Once it gets over 5%, there's going to be obvious pressure to start making tradeoffs."

    Powell insists the central bank will not be swayed by political pressure to take its foot off the brake prematurely. He argues that's the mistake policymakers repeatedly made in the 1970s, allowing inflation to become more firmly entrenched.

    "We will keep at it until the job is done," Powell told an audience at the CATO Institute this month. "The longer inflation remains well above target, the greater the risk that the public does begin to see higher inflation as the norm, and that has the capacity to really raise the cost of getting inflation down."

    Recent surveys have shown that despite today's high inflation rate, Americans expect prices to stabilize in the next few years. People have grown more confident of that over the summer as the cost of gasoline — with its highly visible price tag — has fallen.

    fed chairman jerome powell

    inflation federal reserve

    स्रोत : www.npr.org

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