Federal Reserve raises the expected inflation rate, interest rates to move up accordingly

According to James McCann, Deputy Chief Economist, Aberdeen Standard Investments, “The Fed is now signalling that rates will need to rise sooner and faster, with their forecast suggesting two hikes in 2023. This change in stance jars a little with the Fed’s recent claims that the recent spike in inflation is temporary.”

The expected inflation rates went up and there is still no concrete statement about a pullback on the bond-buying program. The ‘dot plot’ of individual member expectations at the Federal Open Market Committee indicates two hikes in the borrowing rates.

Expected GDP moves from 6.5% to 7%. The unemployment rate still set at 4.5%. Market reaction to the news release can be seen- stocks are falling.