The Fed announced that 75 basis points of interest rate hikes should be inflation.

(Morning News) The Federal Reserve Committee announced on Wednesday (June 15) that it raised 75 basis points between the federal fund interest rate target range to 1.5%and 1.75%.This is the first 75 basis points in the Federal Reserve ’s interest rate hike since 1994.

The Federal Reserve issued a statement after a two -day monetary policy meeting saying that the overall economic activities in the United States have risen after a slight decline in the first quarter.In recent months, employment has grown strong, and the unemployment rate has remained low.The inflation rate is still high, reflecting the imbalances related to supply and demand related to the rising epidemic, rising energy prices, and wider price pressure.In addition, incidents such as Russia and Ukraine have caused additional upward pressure on inflation and put the global economic pressure.

Statement said that the Fed attaches great importance to the risk of inflation and seek the goal of achieving full employment and 2%of the long -term inflation rate.In order to support these goals, the Fed decided to adjust the federal fund's interest rate target range to 1.5%to 1.75%, and it is expected that this continuous upward adjustment is appropriate.In addition, the Fed will continue to "shrink" the plan to reduce the scale of the Fed's balance sheet in May.The statement emphasizes that the Fed is firmly committed to pulling inflation back to 2%.

The Federal Reserve's control of inflation promises has triggered the general tightening of credit in the United States real estate and stock markets, and may slow down the needs of the entire economy. This is also the intention of the Federal Reserve.

Officials also imagine that the rest of the time remains steadily interest rate hikes this year, which may include an additional 75 basis interest rate hikes, and the federal fund interest rate will reach 3.4%at the end of the year.This will be the highest level since January 2008; the Fed's forecast shows that this will make the economy significantly slow down in the next few months and lead to an increase in unemployment rate.

The Fed Chairman Powell said at a press conference after the policy meeting, "We don't want people to be unemployed" and added that the central bank "did not try to induce economic recession."

He mentioned the Ukrainian war and global supply issues: "Our goal is indeed while maintaining a strong labor market, and the inflation rate is reduced to 2%...Factors will play a very important role in the process of determining this possible process. "

Powell told reporters: "We have a path to that goal. It is not easier to become, it is becoming more challenging."

He pointed out that the interest rate hikes announced last month and March not only did not slow the inflation, but let inflation continue to accelerate. Recent data shows that inflation has begun to affect the public's attitude, which may make the Fed's work even more.difficulty.