Market Data
June 17, 2022
CRU on June FOMC: Extraordinary Inflation Requires an Extraordinary Response
Written by Veronika Akhmadieva
By CRU Economist Veronika Akhmadieva, from CRU’s Global Economic Outlook
With a higher-than-expected headline CPI inflation reading of 8.6% in May, the Fed opted for an even more aggressive monetary tightening. After a 50 bps increase in the federal funds rate in May – which is the highest increase since 2000 – the Fed raised the federal funds rate by 75 bps which is the highest increase in 27 years, bringing it to a range of 1.5%–1.75%. The median estimate of Fed policymakers for the Federal Funds rate at 2022 year-end is now 3.375%, suggesting that we will see at least additional 175 bps worth of increases before 2022 is over.
