Fed's interest rate hikes 2022-2024: A comprehensive timeline
What does it mean when the Fed raises interest rates?
When the Federal Reserve (Fed) raises interest rates, it refers to the Fed's decision to adjust monetary policy by increasing the federal funds rate after holding a meeting to discuss interest rates in Washington, D.C. The federal funds rate represents the cost of borrowing and lending funds among financial institutions and serves as one of the primary tools for the Fed to implement monetary policy.
What are the primary objectives of the Fed's interest rate hikes?
The primary objectives of the Fed's interest rate hikes are to control inflation, stabilize economic growth, and maintain financial market stability. By raising borrowing costs, the Fed can slow down the pace of economic activity, prevent prices from rising too rapidly, and simultaneously contribute to maintaining the stability of financial markets.
What are the impacts of the Fed's interest rate hikes?
On the US economy: Interest rate hikes can lead to higher bank interest rates, subsequently reducing the money supply and causing the US dollar to appreciate. The appreciation of the dollar may result in a decline in gold prices as investors prefer to hold dollars over safe-haven assets such as gold. Additionally, interest rate hikes can lead to volatility in the US stock and bond markets.
On the global economy: Since the US dollar is one of the global reserve currencies, the Fed's interest rate hikes can also impact other countries' economies and financial markets. For instance, the appreciation of the dollar may lead to the depreciation of other currencies, subsequently affecting those countries' exports and economic growth. Furthermore, interest rate hikes can trigger changes in capital flows, potentially causing disruptions in emerging market countries' financial markets.
Fed Interest Rate Hikes 2022-2024
| Sequence | Time | Magnitude of Increase Target | Range for Federal Funds Rate |
| 1 | 2022.03 | 25 basis points | 0.25% ~ 0.50% |
| 2 | 2022.05 | 50 basis points | 0.75% ~ 1.00% |
| 3 | 2022.06 | 75 basis points | 1.50% ~ 1.75% |
| 4 | 2022.07 | 75 basis points | 2.25% ~ 2.50% |
| 5 | 2022.09 | 75 basis points | 3.00% ~ 3.25% |
| 6 | 2022.11 | 75 basis points | 3.75% ~ 4.00% |
| 7 | 2022.12 | 50 basis points | 4.25% ~ 4.50% |
| 8 | 2023.02 | 25 basis points | 4.50% ~ 4.75% |
| 9 | 2023.03 | 25 basis points | 4.75% ~ 5.00% |
| 10 | 2023.05 | 25 basis points | 5.00% ~ 5.25% |
| 11 | 2023.07 | 25 basis points | 5.25% ~ 5.50% |
As of August 14, 2024, the Federal Reserve has raised interest rates 11 times in this round.
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Fed's interest rate hikes
What are the impacts of the Fed's interest rate hikes?
