The Federal Reserve’s FOMC has a new Prime Rate hike for the third time in 2023. The latest Fed rate hike means more misery for consumers as inflation continues to impact consumer confidence and finances. Here is what you need to know about the latest Federal Reserve Prime Rate hike.
Another Prime Rate Hike from the Fed’s FOMC
The United States Federal Reserve has once again raised interest rates. The Federal Reserve’s Federal Open Market Committee (FOMC) has raised interest rates for the tenth consecutive time. At the latest meeting of the FOMC – the third such meeting in 2023 – officials voted to issue another rate hike, with the Prime Rate currently set at 8.25%
The FOMC reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC again agreed to raise the target borrowing rate by 25 base points – or a quarter-percentage point – to try and control inflation and threats to the economy from bank failures. This tenth-consecutive increase is the fastest series of rate hikes in nearly 50 years.
Fed Seeks to Boost Confidence In Economy
Financial experts have been struggling to predict the economy’s twists and turns, with conflicting signals, like an improving job forecast yet climbing inflation, leading towards a more conservative approach by the FOMC. Despite difficult political wrangling over an increase to the nation’s debt ceiling, the oversight committee has already done a lot to get climbing inflation under control.
The FOMC’s latest statement seeks to calm economists by highlighting recent, modest growth of the economy and a strong US banking system. “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook,” the FOMC said. “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
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