NEW YORK, Sept 21 (Reuters) – The Federal Reserve raised its target interest rate by three-quarters of a percentage point to a range of 3.00%-3.25% on Wednesday and signaled more large increases to come in new projections showing its policy rate rising to 4.40% by the end of this year before topping out at 4.60% in 2023 to battle continued strong inflation.
The U.S. central bank’s quarterly economic projections, meanwhile, showed the economy slowing to a crawl in 2022, with year-end growth at 0.2%, rising to 1.2% in 2023, well below the economy’s potential. The unemployment rate is projected to rise to 3.8% this year and 4.4% in 2023. Inflation is seen slowly returning to the Fed’s 2% target in 2025.
Fed Chair Jerome Powell at a press conference after the Fed announced raised its benchmark rate by 75 basis points for a third straight meeting, said achieving a soft landing is “very challenging,” and policymakers are unsure if the process of tightening policy will lead to a recession or how deep any contraction might be.
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