By Tom Burnett CFA
On July 26, 2023, the Federal Reserve raised the Federal Funds rate by 0.25% to a range of 5.25% to 5.50%, the highest level in 22 years. In its public announcement, the Fed maintained its goal of 2.0% inflation. The vote to raise rates was unanimous. In addition, the Fed statement repeated the goal of balance sheet reduction, $60 billion per month in Treasury holdings and $35 billion per month in holdings of mortgage-backed securities. The Fed noted that U.S. GDP growth is slowing, but remains positive amid a strong labor market. The Statement made clear the Fed’s goal of bringing inflation down to the 2% level.
The next Fed meeting will be held on September 20, 2023.
Tom Burnett CFA is Director of Research