The Federal Reserve announced that it will raise the target range for the federal funds rate to between 5% and 5.25% on Wednesday, marking a quarter point increase and its third such move of 2023 and 10th since it began its efforts to curb rising inflation last March.
According to the Associated Press, the most recent increase brings the rate to “the highest level in 16 years,” although, according to the same report. there are indications that the Fed may be slowing down its rate increase actions.
Prior to this week’s increases, the Fed had already increased rates twice this year while raising them seven times in 2022. The rate increases began in March and May of 2022, with the Fed continuing its efforts to curb rising inflation in June 2022 by increasing the federal funds rate to a range between 1.5% and 1.75%, which, according to Yahoo Finance, was “the largest move [the Fed] has made in a single meeting since 1994.” The Fed then followed up with an increase of the same magnitude in July 2022, increasing the target range to 2.25% to 2.5%, followed by another three-quarter-point increase in late September 2022 and yet another in November 2022. The Fed then increased rates for a seventh time in December 2022, although by half a point instead of the three-quarter-point increases it issued in the other actions throughout the year. The Fed then lifted rates by a quarter point in both February and March of this year.
