FOMC Update

March 22, 2023
The FOMC raised its benchmark rate by 25bp to a new range of 4.75%-5.00%, the highest since September 2007. This rate hike marks the 9th hike in a row since the Fed began hiking in May 2022. The Fed anticipates that “additional policy firming may be appropriate,” a shift from their previous statement language which noted that “ongoing increases” would be appropriate. The Fed’s year-end projection remained unchanged at 5.13%, which suggests that there will be one more 25bp rate hike this year. The median year-end projection for 2024 rose to 4.30% from 4.10%.
 
Rates and Market: 
  • Fed Funds Target: 4.75%-5.00% 
  • Market Reaction:  S&P 500 index moved higher while interest rates moved lower across the curve
The FOMC announced the following actions and analysis: 
  • Unanimous policy vote
  • The Fed said that the US banking system is “sound and resilient” however, cautioned that “recent developments are likely to result in tighter conditions for households and businesses and to weigh on economic activity, hiring and inflation. The extent of these effects is uncertain.”
Read Full FOMC Statement
Implementation Note issued March 22, 2023