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FOMC issues modest rate hike
The Federal Open Market Committee (FOMC) wrapped up its May meeting yesterday afternoon, during which the FOMC elected to raise the federal funds rate 25 basis points to a range of 5 to 5.25 percent – marking 10 consecutive meetings with a rate increase.
In the committee’s statement following the meeting, it noted that economic activity expanded in the first quarter of 2023, unemployment remained low, and inflation remained elevated. However, the FOMC also mentioned it “will continue to monitor the implications of incoming information for the economic outlook” and is “prepared to adjust the stance of monetary policy if risks emerge” that could hinder its ability to reach the target inflation rate of 2 percent.
“The FOMC tweaked the language in their statement, omitting previous text that signaled further rate hikes,” said NAFCU Vice President of Research and Chief Economist Curt Long. “The Committee left themselves room to change course, but for now it appears that the Committee’s preference is to leave rates at their present level until there is meaningful progress on the inflation front.”
More insights can be found in the new Macro Data Flash report. The FOMC will next meet June 13-14.