Fed projects 2 rate hikes in 2023

The US Federal Reserve decided to hold the interest rate between zero and 0.25% unchanged, and addressed the recent rise in inflation according to the recent economic data, as the Fed officials see that the rise in consumer prices is temporary.

The Fed stated that it will continue to by government bonds and mortgage-backed securities worth $120 billion per month.

The Fed also stressed that there are signs of an improvement in employment, and the sectors that were most hit by the pandemic are showing a remarkable improvement.

The FOMC stated that it expects 2 interest rate hikes in 2023, and raised its forecast for US GDP growth this year to 7% from 6.5% in March.

Whilst the central bank kept its forecast for the US economy growth in 2022 at 3.3%, but raised its forecast for 2023 to 2.4% from 2.2%.

The Fed expects the personal consumption expenditures index (which the Fed uses to measure inflation) to rise by 3.4% in 2021 from 2.4%, and raised its forecast for 2022 and 2023 to 2.1% and 2.2% respectively.

The central bank projected that the unemployment rate will fall to 4.5% this year, and lowered its forecasts for it to 3.8% in 2022 from 3.9%.