and the Fed expected to raise rates
by half of a percentage point to three quarters
of a percentage point that news coming in.
The Fed raising rates by 75 basis points.
Three quarters of a percentage point higher than previously expected before that,
Hotter than expected inflation.
Read that we got on Friday consumer prices of 8.6% in May
From the same time a year ago.
These higher rates all in an effort to
bring down inflation running at its fastest pace
in 40 years. And the stock market still
able to cling to gains and actually rise in the wake of this fed decision,
the NASDAQ higher by 2.1%.
Is that 10 year Treasury yield inches a little bit lower pre decision
the S and P 500 up to 1.1%. The down now higher by 7/10 of a percent.
This is pretty much in line with where we had started
the two p.m. hour before the Fed decision hit,
but it was broadcast earlier this week, starting on monday into Tuesday.
And certainly today with the ultimate decision,
The Fed deciding to raise rates
By more than previously forecast by more than I had expected at its last meeting.
And again, that is to combat inflation
that hasn't yet peaked inflation again picking up in may greater
than the reeds that we have seen earlier throughout this year.
We've been hovering above 8% in terms of consumer price indexes
from the same time a year ago for at least three months now.
And the Fed taking aggressive measures
to bring down inflation but trying to avoid a hard landing.
Will the economy run into a recession?
We do not yet know those are the big questions that we are awaiting.
So these Fed decisions always big days in the market,
our still awaiting all of the details of this particular decision.
But again, a 75 basis point rate rise for the Federal Reserve.
And that will be something that markets
will be watching closely here as we head into the close
of trade with two hours left in the trading session.
So the Fed does see its median view of Fed funds at the end of 2022,
I'm at 3.4% vs 1.9% in its march projection
Of the media. In view of the Fed funds rate at the end of 2023, that would be next year.
3.8%.
And then at the end of 2024,.
So it sounds as if it does plan to aggressively raise rates
throughout this year into next year as well,
then might ultimately bring rates a little bit lower.
Once inflation can stabilize.
The Fed has a dual mandate, it's looking for maximum employment.
Certainly the jobs market is very strong
remains so after the May jobs support that we got just a week ago
About inflation still running well above that 2% long term target for the Fed
And the Feds median view of its Fed funds rate in the longer run
now seen it 2.5% so it wants to create price stability
again that's an inflation rate of about 2% over the long run
to avoid a stagflation environment. That's higher prices, lower growth.
Still unclear whether or not the U. S. Economy will actually fall into a recession.
But the Fed trying to balance out the economy
for the long term after two plus years
of the coronavirus has disrupted supply chains,
caused lockdowns with people at home around the world
and of course Russia's ongoing invasion of Ukraine.
The Fed does see its year end US jobless rate at 3.7% this year.
3.9% in 2023
and 4.1% in 2024
Does anticipate actually inflation at 5.2% this year.
That's almost a full percentage point increase from its previous forecast to 4.3%.
Every other meeting the Fed comes out with economic projections.
And these are the economic projections
I'm bringing to you now.
So certainly does the inflation running a much hotter than previously expected.
But does anticipate that by 2023 next year inflation can come down
to 2.6% and then 2.2%
By 20 at 24