September 21, 2022

The economy continues to see modest growth in spending and production, with increased job gains and low unemployment. However, elevated inflationary pressures have caused the Federal Reserve to raise the benchmark interest rate by 0.75% effective September 21, 2022 and they intend on maintaining this approach of hiking.

The Russia-Ukraine war continues to weigh on the global economy, causing disruptions in the economy and creating additional upward inflationary pressures.

The long-term goals are maximum employment and inflation at a rate of 2% over the longer run. To achieve this and reduce inflation, the Committee has raised the target range for the federal funds rate to 3% to 3.25% and anticipates future increases to the target rate. Furthermore, the Committee will continue to reduce the money supply of the economy by reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.

The Committee will continue to monitor the implications of incoming data for the economic outlook in determining the appropriate stance of monetary policy. If risks that could impede the Committee’s goals emerge, the Committee would be willing to adjust its monetary policy stance as needed. The Committee’s assessments will consider a wide range of data, including readings on public health, labor market conditions, inflation pressures and expectations, and financial and international developments.

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