CUNA Senior Economist Dawit Kebede issued the following statement following the Federal Reserve meeting today:
“The Federal Reserve raised interest rates by 75 basis points as expected, increasing the target rate between 3 – 3.25 percent. Members of the Federal Open Market Committee (FOMC) upped their year-end interest rate projection from 3.4% in June to 4.4%.
“This indicates that the Federal Reserve is putting the brakes on the economy faster than expected to bring inflation down to its 2% target. The FOMC median forecast for interest rates remains at or above 4% through 2024.
“High interest rates restrict consumption and investment activity by raising the cost of borrowing funds. This slows the economy and increases the likelihood of a recession considering that the GDP has slipped the last two quarters.
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