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The Fed announced a sharp 75 basis point rate hike, the largest increase in 28 years

After the Fed's interest rate meeting, the Federal Reserve announced a sharp 75 basis point hike in interest rates to 1.25%-1.50%, the largest increase in 28 years, in line with market expectations. The statement after the meeting pointed out that the high bank firmly committed to returning the inflation rate to the 2% target, and expected that the July meeting would most likely raise interest rates by 50 or 75 basis points, but the action of raising interest rates by 75 basis points would not become the norm. According to the latest interest rate dot plot, the bureau expects the median interest rate to reach 3.4% this year and rise to 3.8% next year, an increase of 1.5 and 1.0 percentage points respectively from the March forecast. It is expected to be 3.4% in the following year. In addition, the Federal Reserve also lowered its economic growth forecast for the year to 1.7%, lower than the earlier forecast of 2.8%. However, the inflation forecast was raised by 0.9 percentage points to 5.2%, while the unemployment rate forecast was 4.1%. On the economic front, the bureau said it has no intention of triggering a recession. It believes that overall consumer spending is still strong, employment growth is slowing but still solid, and the economy shows no signs of a broader slowdown.
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