Fed hikes rates 25 bps, expects one more increase this year

The Federal Reserve raised the federal funds rate by 25 basis points in its first hike since July 2023. The decision was unanimous at 12-0 and aims to deliver a timelier return to 2% inflation. Guidance and projections indicate a higher-for-longer policy path.

Decision

- Rate increase: 25 basis points
- Vote: 12-0 unanimous

Inflation and Policy Guidance

- Objective: Timelier return to 2% inflation
- Median forecast: One additional 25 basis point hike in 2026
- Policy stance: The Committee will deliver price stability
- Interpretation: Higher-for-longer rates signaled

Labor Market Assessment

- Job gains: Strong
- Unemployment: Changed little