Borrowing costs rose to their highest level in 14 years, and more interest-rate hikes are likely, Fed signaled.
The Fed's target interest rate is now in the range of 3% to 3.25%, the highest level in 14 years. The bank's rate-setting panel also projected that the Federal Funds rate would hit 4.4% by year-end, up sharply from a projection of 3.4% in June, and 4.6% in 2023, up from a previous estimate of 3.8%.
Higher interest rates are likely to be a big drag on economic growth, officials noted in projections released along with the Fed's latest policy statement. Fed officialsGDP will expand by just 0.2% this year and 1.2% next year, down from a rosier forecast in June of 1.7% growth in 2022 and 2023.
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