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Fed Raises Benchmark Rate a Quarter-Point, After Five Consecutive Larger Increases

As was widely predicted in the markets, the Federal Reserve on Wednesday said it would raise the federal funds rate a quarter-point to a range of 4.5% to 4.75%. The smaller increase from the Fed’s Federal Open Market Committee followed a half-point increase in December, which in turn followed four consecutive rate increases of 0.75 points each. 

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” according to the FOMC statement. 

The question now is what the Fed will do next, i.e. how long it will continue raising the benchmark rate, and how large the increases will be. “They’ll likely do another 25 [basis points] at the March meeting and that’s when the cycle comes to end,” Tom Porcelli, chief U.S. economist at RBC Capital Markets, wrote in a client note cited by CNBC.  

He added, “We see incredibly limited scope for the Fed to plausibly justify keeping this cycle going deeper into the year with what will already be a very restrictive policy stance in the face of what are likely mounting economic challenges to the backdrop.” 


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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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