Fed Unanimously Raises Rates by a Quarter Point

Summary

The Federal Reserve raised its benchmark rate by a quarter point to 3.75%-4% in a unanimous decision. Officials penciled in another hike this year and forecast faster growth, stable unemployment, and elevated inflation, with the 2% inflation target pushed out to 2029. The Fed also raised its longer-run neutral-rate estimate to 3.2%.

• Fed raised rates 25bp to a 3.75%-4% range, unanimously.
• Sixteen committee members expect another hike this year, while two would hold.
• Growth forecasts were raised to 2.3% this year and 2.4% next year.
• Unemployment is forecast to remain at 4.1% through 2029.
• Inflation remains elevated, with headline PCE seen at 3.7% this year and core PCE at 3.4% at end-2026.
• The return to the 2% inflation target was pushed out to 2029.
• The longer-run neutral rate estimate was raised to 3.2% from 3.1%.
• The statement said policy action will support a timely return to price stability.