The US central bank (Fed) announced on the 21st (local time) that it would raise the key interest rate to 4.4% by the end of the year. This means that the base rate, which is 3.0-3.25% due to the increase of 75bp (1bp = 0.01% point) on the day, can be raised further to around 140bp within the year.
The Fed announced it would raise its key interest rate by 75 basis points in a statement after the regular FOMC meeting on the same day. At the same time, the Fed predicted the interest rate level at the end of this year at 4.4% through a dot plot (an indicator showing interest rate forecasts with dots). After raising the base rate to 4.6% at the end of next year, it is expected to maintain the level of 3.9% in 2024.
Judging from the dot chart alone, it can be interpreted that there is a high possibility that the increase in the base rate will stop and turn to a rate cut in the second half of 2023 or 2024 at the earliest.
Earlier, at the FOMC in June, the base rate was expected to be 3.4% at the end of this year, but it was raised by 1.0 percentage points at a time.
Washington = Correspondent Jeong In-seol email@example.com