FOMC is expected to push the Fed Funds target to a range of 1.25% to 1.50%.

 WASHINGTON–The Federal Reserve’s Open Market Committee will begin two days of meetings today, and when it adjourns on Wednesday it is expected to announce it is pushing up interest rates by 50 basis points as it seeks to fight inflation.

The move is expected to push the Fed Funds target to a range of 1.25% to 1.50%.

Economic observers will be closely watching the FOMC statement on Wednesday for signals for what the Fed sees ahead and to what degree it will remain hawkish. Some economists have speculated the Fed will boost rates 75 basis points as it seeks to tamp down rapidly growing inflation. Others are sticking with their half-point increase projection but then expecting another half-point increase when the Fed meets again in July.

CU Economists’ Views

Last week, following new data showing the Labor Department’s Consumer Price Index showed prices climbed 8.6% in 2022 through May, CUNA Senior Economist Dr. Dawit Kebede, agreed with the forecast calling for the 50-basis-point increase this week.

“This will reduce inflationary pressure by slowing consumer demand,” Kebede said. “However, it has little effect on influencing prices caused by supply shortages such as oil.”

NAFCU’s Chief Economist, Curt Long, added, “Credit unions should be prepared for more hawkish talk from Fed officials and the related market impacts…”

As CUToday.info reported here, CUNA Mutual Chief Economist Steve Rick has also offered a forecast for inflation.