Here’s What We’re Thinking
March 18, 2022
March 22, 2022
Despite tighter policy and geopolitical risks, the Fed forecasts a “soft-landing” with little effect on growth or employment. The U.S. Federal Reserve raised the target range for the federal funds rate by 25 bps in a widely expected move this week and set out a more aggressive path for policy normalization than we and consensus had predicted. The median projection in the updated “dot plot”, which shows each member’s interest rate forecast, signaled six more hikes this year, and the Federal Open Market Committee’s (FOMC’s) policy statement indicated that ongoing increases in the target range will be appropriate. That said, the FOMC intends to remain data-dependent and to consider a wide range of information when making decisions, including readings on public health, labour market conditions, inflation pressures and expectations, and financial and international developments.
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