Fed Raises Rates By 0.75 Percentage Point, Largest Increase Since 1994

• The Federal Reserve raised its target interest rate by 75 basis points, and projected a slowing economy on June 15. The Fed funds target rate range now lies in the range 1.5% and 1.75%. 
• Whereas in March the Fed expected the federal funds target rate to end this year at 1.9%, it now expects the funds rate at 3.4%, near the point St. Louis Fed leader James Bullard, one of the Fed's biggest hawks, has long been calling for. 
• It sees modest action next year that will lift the funds rate to 3.8% from March forecast of 2.8%, and an easing in monetary policy in 2024, to 3.4%, from its March estimate of 2.8%. The Fed sees the longer-run federal funds rate steady at 2.5%. 
• The shift in the Fed's rate projections outlook suggests officials now believe they can get inflation back under control with a front loaded rate rise campaign, and their inflation forecasts holds for a big moderation in price pressure by next year. That said, the story of the Fed for some time has been one of it blowing its inflation forecasts and getting surprised by the persistence of price pressure gains.

(Source: Wall Street Journal)