FOMC summary – July 7, 2022

The minutes of the last FOMC meeting of June, which are revealed a month after the meeting, came as no surprise to anyone. The Federal Reserve continues to keep its focus on what it sees as the biggest threat to economic stability, the uncontrolled rise in inflation.

The rise in inflation has brought the FOMC participants to a conclusion, they unanimously agreed on a 0.75% hike, the first in almost 30 years.

Although they did not directly mention the possibility of a recession, they acknowledged that their policy of raising the benchmark interest rate could lead to an economic slowdown but believe that reducing inflation to near 2% is vital for a healthy economy.

They also reveal that they plan a 0.5% or 0.75% rise in the benchmark interest rate for July. Given the economic deterioration, many investors believe that a 0.75% hike is highly likely.

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