Federal Reserve Expected To Raise Interest Rates A Tad Higher

The Federal Reserve is expected to raise its target interest rate by a quarter of a percentage point on Wednesday (Thursday, Feb. 2, 2023, in Manila), setting aside the rapid hikes used last year to curb a surge in inflation in favor of a more stepwise hunt for a stopping point, Howard Schneider reported for Reuters.

Photo Insert: The expected increase would set the U.S. central bank's benchmark overnight interest rate in the 4.50%-4.75% range, the highest since November 2007.

The expected increase would set the U.S. central bank's benchmark overnight interest rate in the 4.50%-4.75% range, the highest since November 2007, when the economy was on the eve of what would prove to be a long and deep recession.

Policymakers hope to avoid that sort of outcome this time, and economic data since their last policy meeting in December generally has moved in the right direction: Inflation is slowing under the impact of higher interest rates and tighter financial conditions, while the economy continues to grow and create jobs.

The rate-setting Federal Open Market Committee is due to release its policy statement at 2 p.m. EST (1900 GMT). Fed Chair Jerome Powell is scheduled to hold a news conference half an hour later to elaborate on the decision.

Ahead of the Fed's two-day meeting this week, the International Monetary Fund increased its outlook for a global economy that its officials said had proved "surprisingly resilient" in the face of monetary policy tightening and the ongoing war between Russia and Ukraine.

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