Largest since 1994, Fed hikes interest rates by 75 bps

The US Federal Reserve on Wednesday announced that it had lifted interest rates by 75 bps to 1.50-1.75%, as expected.

More details are awaited as Fed Chair Jerome Powell proceeds with the press conference after the FOMC meeting concluded.

The vote split was 10 to one, with Esther George favouring a 50 bps rate hike. The US central bank said in its statement that it anticipates ongoing increases to interest rates to be appropriate, noting that it is strongly committed to returning inflation to 2.0%.

The Fed also released its quarterly economic projections. It now sees PCE inflation ending 2022 at 5.2%, up from 4.3% in March, ending 2023 at 2.6%, at 2.2% in 2024 and then back to 2.0% in the long run. The Fed said it sees US real GDP growth at 1.7% in 2022, down from 2.8% in its March forecasts, then growing at a pace of 1.7% in 2023 and 1.9% in 2024, before then growing at a long-run rate of 1.8%.