The .75 increase is aimed at punching down the inflation rate….
That will mean higher borrowing costs for car ‘s and other big ticket items….
The house market is already catching a cold and going to bed….
They know that a recession is coming in response to this….
The Federal Reserve raised interest rates by three-quarters of a percentage point on Wednesday, its biggest move since 1994, as the central bank ramps up its efforts to tackle the fastest inflation in four decades.
The big rate increase, which markets had expected, has underlined that Fed officials are serious about crushing price increases even if it comes at a cost to the economy.
In a sign of how the Fed expects its policies to affect the economy, officials predicted that the unemployment rate would increase to 3.7 percent this year and to 4.1 percent by 2024, and that growth would slow notably as policymakers push borrowing costs sharply higher and choke off economic demand.
The Fed’s policy rate is now set in a range between 1.50 to 1.75 and policymakers suggested more rate increases to come. The Fed, in a fresh set of economic projections, penciled in interest rates hitting 3.4 percent by the end of 2022. That would be the highest level since 2008 and officials saw their policy rate peaking at 3.8 percent at the end of 2023. Those figures are significantly higher than previous estimates, which showed rates topping out at 2.8 percent next year.
Fed officials also newly indicated that they expected to cut rates in 2024, which could be a sign that they think the economy will weaken so much that they will need to reorient their policy approach. The major takeaway from the Fed’s economic forecasts, which it released for the first time since March, was that officials have become more pessimistic about their chances of letting the economy down gently.
Underlining that, policymakers cut a sentence from their post-meeting statement that had predicted that inflation could moderate while the labor market remained strong — a hint that they believe they may have to slam the brakes on job growth to wrestle inflation under control….