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Economy in Brief

FOMC Lifts Funds Rate Target; Adjusts 2022 Economic Projections
by Tom Moeller  March 16, 2022

At today's meeting of the Federal Open Market Committee (FOMC), the Fed announced that it will raise the target for the Federal funds rate to a range of 0.25% - 0.50% from 0.0% - 0.25%. The current rate has been in place since March 2020.

The Fed indicated that "the invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity."

It also stated, "With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong."

The statement issued following today's meeting can be found here.

Current Last 2021 2020 2019 2018
Federal Funds Rate Target 0.25% - 0.50% 0.0% - 0.25% 0.08 0.38% 2.17% 1.82

At today's meeting, the Committee lowered its projected 2022 growth in real GDP and raised the projected growth in core price inflation. It raised its "appropriate" level of the Fed funds rate at the end of 2024 to 2.8% from 2.1%

FOMC Projections 2022 (Old) 2022 (New) 2023 (Old) 2023 (New) 2024 (Old) 2024 (New)
Real GDP (Q4/Q4) 4.0 2.8 2.2 2.2 2.0 2.0
Core PCE Price Index (Q4/Q4) 2.7 4.1 2.3 2.6 2.1 2.3
Unemployment Rate (4Q %) 3.5 3.5 3.5 3.5 3.5 3.6
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