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Summary
The FOMC (the interest rate setting committee) decided by a unanimous vote (12-0) to raise interest rates to a range between 3.75% and 4.00%.
Most FOMC voters expect to hike interest rates at least one more time this year.
Of concern, Warsh argues that inflation is driven by the fact that the US economy has ‘strengthened’, although data suggest otherwise.
Commentary
The Statement
Below is how the FOMC statement has changed from the previous FOMC meeting:
The interest rate hike was expected by markets and is most likely the right decision, as I argued here. Perhaps somewhat surprisingly, there were no dissents, either for holding rates steady or for a further interest rate hike. In addition to the statement above, the Federal Reserve has also published what FOMC participants forecast macroeconomic variables to be in the following years - GDP, unemployment, inflation, and interest rates.
What you’ll find behind the paywall:
Why subtle changes in the Fed's wording signal another rate hike is coming;
What the Fed’s new forecasts tell us about future rate hikes;
Why I disagree with Warsh’s diagnosis of what is really driving current inflation;
My own scenario-based forecast for interest rates and inflation.
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