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  • In Very “Hawkish Hold,” Fed Keeps Rates at 5.50% Top of Range, Sees One More Hike in 2023, Only Two Rate Cuts in 2024, to 5.25%. QT Continues

In Very “Hawkish Hold,” Fed Keeps Rates at 5.50% Top of Range, Sees One More Hike in 2023, Only Two Rate Cuts in 2024, to 5.25%. QT Continues

September 21, 2023

by Wolf Richter Wolf Street

The shocker was the infamous “dot plot”: Higher for even longer, ending the year 2024 at 5.25%.

The FOMC kept its five policy rates unchanged today, with the top of its policy rates at 5.50%, after the rate hike at its prior meeting in July. Various Fed governors have had broadly telegraphed this move in recent weeks. The Fed has hiked by 525 basis points so far in this cycle. The vote was unanimous.

The shocker coming out of today’s Fed meeting was the infamous “dot plot,” where individual members of the Fed’s FOMC project the trajectory of monetary policy in the future: As before, they saw one more rate hike in 2023, to 5.75% top of range, but they slashed their rate-cut projections for 2024 by half, from four rate cuts, to just two rate cuts, ending the year 2024 at 5.25%. Higher for longer.