Laserfiche WebLink
Federal Reserve <br />Source: Federal Reserve Source: Bloomberg <br />As expected the Federal Open Mar ket Committee (FOMC)raised the federal funds rate by 0.25%at their March meeting to a target range of <br />0.25%to 0.50%.,This was the first increase since 2018,after two years of holding the federal funds rates near zero to insulate the economy <br />from the impacts of the pandemic.The Federal Reserve (Fed)also ended their bond-buying program as expected in March,which grew the <br />balance sheet to about $8.9 trillion.Fed Chair Powell suggested that balance sheet runoff could begin as early as their next meeting in May, <br />sooner than previously anticipated,and that the pace of the unwind will likely be faster than in the previous quantitative tightening cycle.The <br />dotplot favors six additional rate hikes in 2022,which implies a 25 basis point rate hike at each remaining meeting this year,but the Fed hasn’t <br />ruled out incorporating one or more 50 basis point hikes to address inflation.The FOMC’s Summary of Economic Projections forecasts higher <br />Personal Consumption Expenditure (PCE) inflation this year at 4.3% and a lower growth rate of 2.8% real GDP. <br />0.00% <br />0.25% <br />0.50% <br />0.75% <br />1.00% <br />1.25% <br />1.50% <br />1.75% <br />2.00% <br />2.25% <br />2.50% <br />2.75% <br />Effective Federal Funds Rate <br />Yield (%)2,000,000 <br />3,000,000 <br />4,000,000 <br />5,000,000 <br />6,000,000 <br />7,000,000 <br />8,000,000 <br />9,000,000 <br />10,000,000 <br />Federal Reserve Balance Sheet Assets <br />In$ millions11