Federal Reserve Raises Federal Funds Target Range to 2.25%

Against the backdrop of strong growth and given the risk of capacity constraints and inflation, the Federal Reserve followed its carefully laid out plan and raised rates to the surprise of no one. The federal funds target range moves to 2.00 to 2.25 percent with the midpoint target at 2.125 percent. Based on updated FOMC forecats, one more 25-basis-point hike is still scheduled for the remainder of the year, undoubtedly with expectations to be exclusively centered on the December meeting, with three such hikes still scheduled for next year.