Final Fed Meeting Brings Expected Rate Hike and Projections for 2023

In the December 15 FOMC meeting, the Fed voted unanimously to increase rates by 50bp, after 4 increases of 75bp, and released its projections for 2023 and beyond. Further, Fed Chair Jerome Powell proposed the continuation of rate increases into 2023 to bring the target policy rate above 5%, which would be its highest since 2007, and at a restrictive level for the next two years. In response to improved inflation data from October and November, Powell said the Fed would be looking for ‘substantially more evidence to give confidence inflation is on a sustained downward path.’ Stocks closed lower on Wednesday after the announcement.

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