When Did The Fed Begin Raising Rates?

In 2023, the Federal Reserve embarked on a series of interest rate increases. The initial rate hike took place in February when the Fed raised interest rates by 25 basis points, equivalent to 0.25%. This adjustment brought the target range for the federal funds rate to a level between 4.50% and 4.75%. Subsequently, in both March and May 2023, the Federal Reserve implemented additional 0.25% rate hikes. As a result of these successive increases, by May 2023, the federal funds rate had reached a target range of 5.00% to 5.25%. This series of rate hikes was part of the Fed’s efforts to manage monetary policy in response to prevailing economic conditions and inflationary pressures.

How many times has the Federal Reserve (Fed) raised interest rates? As of July 26, 2023, the Fed has executed its 11th interest rate hike since March 2022. This decision was made unanimously by the Federal Reserve, indicating broad consensus within the organization. The rate hikes have been implemented in response to changes in economic conditions, notably a reduction in inflation. Inflation, which had surged to approximately 9% in the previous year, has since moderated to around 3% for the 12-month period ending in June. This shift in monetary policy reflects the Fed’s ongoing efforts to balance economic stability and growth.

Will the Federal Reserve opt for another rate hike in September 2023? To gauge the likelihood of such a move, we can turn to the futures market, which provides valuable insights. According to the CME’s FedWatch Tool, as of August 1, 2023, the market assigns approximately a 1 in 3 chance that the Fed will increase interest rates either during the September meeting or the subsequent one in November. This assessment helps us better understand the current expectations regarding the Federal Reserve’s monetary policy decisions in the coming months.