and the Fed expected to raise rates by half of
a percentage point to three quarters of a percentage point
that news coming in. The Fed raising rates by
75 basis points. Three quarters of a percentage point
higher than previously expected before that, Hotter than expected
inflation. Read that we got on Friday consumer prices
of 8.6% in May From the same time a year
ago. These higher rates all in an effort to
bring down inflation running at its fastest pace in 40
years. And the stock market still able to cling
to gains and actually rise in the wake of this
fed decision, the NASDAQ higher by 2.1%. Is
that 10 year Treasury yield inches a little bit lower
pre decision the S and P 500 up to 1.1%
. The down now higher by 7/10 of a percent
. This is pretty much in line with where we
had started the two p.m. hour before the Fed decision
hit, but it was broadcast earlier this week,
starting on monday into Tuesday. And certainly today with
the ultimate decision, The Fed deciding to raise rates
By more than previously forecast by more than I had
expected at its last meeting. And again, that
is to combat inflation that hasn't yet peaked inflation again
picking up in may greater than the reeds that we
have seen earlier throughout this year. We've been hovering
above 8% in terms of consumer price indexes from the
same time a year ago for at least three months
now. And the Fed taking aggressive measures to bring
down inflation but trying to avoid a hard landing.
Will the economy run into a recession? We do
not yet know those are the big questions that we
are awaiting. So these Fed decisions always big days
in the market, our still awaiting all of the
details of this particular decision. But again, a
75 basis point rate rise for the Federal Reserve.
And that will be something that markets will be watching
closely here as we head into the close of trade
with two hours left in the trading session. So
the Fed does see its median view of Fed funds
at the end of 2022, I'm at 3.4% vs
1.9% in its march projection Of the media. In
view of the Fed funds rate at the end of
2023, that would be next year. 3.8%.
And then at the end of 2024, So it
sounds as if it does plan to aggressively raise rates
throughout this year into next year as well, then
might ultimately bring rates a little bit lower once inflation
can stabilize the Fed has a dual mandate, it's
looking for maximum employment. Certainly the jobs market is
very strong remains so after the May jobs support that
we got just a week ago, but inflation still
running well above that 2% long term target for the
Fed and the Feds median view of its Fed funds
rate in the longer run now seen it 2.5% so
wants to create price stability again. That's an inflation
rate of about 2% over the long run to avoid
a stagflation environment. That's higher prices, lower growth
. Still unclear whether or not the U. S
. Economy will actually fall into a recession. But
the Fed, trying to balance out the economy for
the long term after two plus years of the coronavirus
has disrupted supply chains, caused lockdowns with people at
home around the world. And of course Russia's ongoing
invasion of Ukraine. The Fed does see its year
end US jobless rate at 3.7% this year. 3.9%
in 2023 and 4.1% in 2024 Does anticipate actually inflation
at 5.2% this year. That's almost a full percentage
point increase from its previous forecast to 4.3%. Every
other meeting the Fed comes out with economic projections.
And these are the economic projections I'm bringing to you
now. So certainly does the inflation running a much
hotter than previously expected. But does anticipate that by
2023 next year inflation can come down to 2.6% and
then 2.2% By 20 at 24