AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 132.66 Increased By ▲ 3.13 (2.42%)
BOP 6.89 Increased By ▲ 0.21 (3.14%)
CNERGY 4.57 Decreased By ▼ -0.06 (-1.3%)
DCL 8.92 Decreased By ▼ -0.02 (-0.22%)
DFML 42.75 Increased By ▲ 1.06 (2.54%)
DGKC 84.00 Increased By ▲ 0.23 (0.27%)
FCCL 32.90 Increased By ▲ 0.13 (0.4%)
FFBL 77.06 Increased By ▲ 1.59 (2.11%)
FFL 12.20 Increased By ▲ 0.73 (6.36%)
HUBC 110.01 Decreased By ▼ -0.54 (-0.49%)
HUMNL 14.40 Decreased By ▼ -0.16 (-1.1%)
KEL 5.53 Increased By ▲ 0.14 (2.6%)
KOSM 8.32 Decreased By ▼ -0.08 (-0.95%)
MLCF 39.67 Decreased By ▼ -0.12 (-0.3%)
NBP 65.50 Increased By ▲ 5.21 (8.64%)
OGDC 198.74 Decreased By ▼ -0.92 (-0.46%)
PAEL 26.00 Decreased By ▼ -0.65 (-2.44%)
PIBTL 7.62 Decreased By ▼ -0.04 (-0.52%)
PPL 159.00 Increased By ▲ 1.08 (0.68%)
PRL 26.24 Decreased By ▼ -0.49 (-1.83%)
PTC 18.35 Decreased By ▼ -0.11 (-0.6%)
SEARL 82.24 Decreased By ▼ -0.20 (-0.24%)
TELE 8.12 Decreased By ▼ -0.19 (-2.29%)
TOMCL 34.40 Decreased By ▼ -0.11 (-0.32%)
TPLP 8.98 Decreased By ▼ -0.08 (-0.88%)
TREET 16.88 Decreased By ▼ -0.59 (-3.38%)
TRG 59.49 Decreased By ▼ -1.83 (-2.98%)
UNITY 27.52 Increased By ▲ 0.09 (0.33%)
WTL 1.40 Increased By ▲ 0.02 (1.45%)
BR100 10,614 Increased By 206.9 (1.99%)
BR30 31,874 Increased By 160.5 (0.51%)
KSE100 98,972 Increased By 1644 (1.69%)
KSE30 30,784 Increased By 591.7 (1.96%)

WASHINGTON: The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point and projected its policy rate would hit a range between 1.75% and 2% by year's end in a newly aggressive stance against inflation that will push borrowing costs to restrictive levels in 2023.

In a new policy statement marking the end of its full-on battle against the coronavirus pandemic, the U.S. central bank flagged the massive uncertainty the economy faces from the war in Ukraine and the ongoing health crisis, but still said "ongoing increases" in the target federal funds rate "will be appropriate" to curb the highest inflation in 40 years.

The statement dropped direct reference to the coronavirus pandemic but instead cited the war in Ukraine as creating "additional upward pressure on inflation" and weighing on economic activity.

Fed set to raise interest rates to rein in inflation

The interest rate path shown in new projections by policymakers is tougher than expected, reflecting Fed concern about inflation that has moved faster and threatened to become more persistent than expected, and put at risk the central bank's hope for an easy shift out of the emergency policies put in place to fight the fallout from the pandemic.

Even with the tougher rate increases now projected, inflation is expected to remain above the Fed's 2% target, remaining at 4.1% through this year and dropping only to 2.3% through 2024. Economic growth is seen at 2.8% this year, a sharp drop from the 4.0% growth projected in December.

The unemployment rate is seen dropping to 3.5% this year and remaining there next year, but is projected to rise slightly to 3.6% in 2024.

The new statement said the Fed expects to begin reducing its nearly $9 trillion balance sheet "at a coming meeting," a topic likely to be addressed further by Fed Chair Jerome Powell in a news conference due to begin at 2:30 p.m. EDT (1830 GMT).

St. Louis Fed President James Bullard was the only policymaker to dissent in the Fed's decision.

Comments

Comments are closed.