Federal Reserve Hikes Interest Rate by 0.75%, Biggest Increase Since 1994
Posted on 06/15/2022
The Federal Reserve raised its benchmark interest rates three-quarters of a percentage point. This is the most aggressive interest rate hike since 1994. The Federal Open Market Committee (FOMC) took the level of its benchmark funds rate to a range of 1.5% to 1.75%, the highest since just before the COVID-19 pandemic began in March 2020.
In addition, the FOMC will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May 2022.
According to the Federal Reserve’s press release on June 15, 2022, “Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Lisa D. Cook; Patrick Harker; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. Voting against this action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1-1/4 percent to 1-1/2 percent. Patrick Harker voted as an alternate member at this meeting.”
Keywords: Federal Reserve System.