The FOMC statement released by the Federal Reserve states that recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation has eased somewhat but remains elevated.
Russia’s war against Ukraine is causing tremendous human and economic hardship and is contributing to elevated global uncertainty. The committee is highly attentive to inflation risks.
The committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. In support of these goals, the committee decided to raise the target range for the federal funds rate to 4-1/2% to 4-¾%. The committee 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% over time. In determining the extent of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the committee will continue reducing its holdings of Treasury securities and agency debt, and agency mortgage-backed securities, as described in its previously announced plans. The committee is strongly committed to returning inflation to its 2% objective.
In assessing the appropriate stance of monetary policy, the committee will continue to monitor the implications of incoming information for the economic outlook.