The Strategist

Fed raises rate to the highest since 2007

03/23/2023 - 02:54

The main interest rate of the US Federal Reserve (Fed) was increased by 25 basis points to 4.75–5%. The interest rate rose to its greatest level since 2007, and is expected to be 5.1% on average by the end of 2023.

Kurtis Garbutt
Kurtis Garbutt
"The committee's long-term goals are to attain maximum employment and 2% inflation," reads a statement at the official Federal Open Goals Committee website.

Inflation in the USA is still high, according to the regulator, and further easing of monetary policy may be necessary. The Fed maintained its 2.5% inflation estimate for 2024 and increased it from 3.1% to 3.3% for this year. 

The GDP projections were downgraded from 0.5% to 0.4% and from 1.6% to 1.2% for this year and 2024, respectively. The projected jobless rate for 2023 was reduced from 4.6% to 4.5%, and it remained at 4.6% for 2024.