(AmericanProsperity.com) – Projections released on Wednesday morning revealed that officials from the Federal Reserve expect a significant rise in the US unemployment rate by the end of this year. While the current unemployment rate is at 3.6 percent, Fed’s officials expect it to reach 4.5 percent, meaning that millions of US citizens could lose their jobs over the next few months as the country’s economy grapples with the consequences of the current banking crisis and interest rate hikes affect the economy.
The Federal Open Market Committee published these projections after the US central bank decided to increase interest rates by 0.25 percent, following different collapses in the banking sector that led numerous Wall Street analysts to call for an immediate pause. Another situation that took place before the projections were released was the Labor Department’s consumer price index, which revealed that price growth was still stubbornly high during February at a 6 percent annual rate.
The 0.25 percent hike represents the ninth consecutive rate increase that the US central bank decides to take since March 2022 as part of its quantitative tightening program, which is a plan to reduce the money supply as a way to tackle high inflation. However, the projections also showed that Fed officials expect that the current 6.4 inflation could fall to 3.3 by the end of this year and to 2.5 percent by next year.
Following the Federal Reserve’s announcement, Chairman Jerome Powell told reporters that the process of reducing inflation to 2 percent is going to be long and is going to have ups and downs, adding that the projections that were published aren’t that different from December estimates and would not prevent the US central bank from taking the proper actions if there are changes in the economic conditions.
Finally, Powell told reporters that the economic data since the central bank decided to execute the last rate hike two months ago have “come in stronger than expected.”
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