FOMC policy freeze… Economic outlook is up, interest rate rises as early as next year (complementary)

US Federal Reserve System/AFP=News1

The US Central Bank’s Federal Open Markets Commission (FOMC) froze its monetary policy, but raised its economic outlook.

FOMC announced in a statement released after the meeting on the 17th (local time) that it will freeze the base interest rate to 0~0.25% and continue the bond purchase program of $12 billion per month.

However, the interest rate outlook and economic outlook were raised. The forecast for this year’s economic growth rate has risen from 4.2%, which was expected in December of last year, to 6.5%. Growth rates in 2022 and 2023 are projected to be 3.3% and 2.2%, respectively.

This year’s core inflation forecast also rose to 2.2% from 1.8% three months ago. The Fed aims for an average of 2% inflation.

The interest rate outlook has also been slightly raised. In a dot chart showing the interest rate forecast of 18 FOMC members, four members predicted an interest rate hike next year. In December of last year, there was only one member of the FOMC who expected an increase next year. The number of commissioners expected to increase in 2023 has increased from five to seven.

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