The federal reserve announced that it will be raising interest rates by 75 basis points. Chairman Jerome Powell called the rate hike "essential" to bringing down surging inflation. 

Closing Bell

Federal Reserve Raises Interest Rates by 75 Basis Points 

So I do want to bring in cheddar news reporter Alex volo Alex. It's good to see you what hints was Powell able to offer about what is next at these three meetings that do remain this year. Hey christian. So as usual it's pals m. O. To give himself maximum flexibility while at the same time clearly messaging as best he can without taking away his slack. What the Fed plans to do, Let's let's actually take a listen to one of his key quotes from today's speech. It is essential that we bring inflation down to our 2% goal if we are to have a sustained period of strong labor market conditions that benefit all while another unusually large increase could be appropriate at our next meeting. That is a decision that will depend on the data we get between now and then we will continue to make our decisions meeting by meeting and communicating and communicate our thinking as clearly as possible as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation. So as you heard there uh, you know, the key takeaway there is that we could see a slowing but more so at this Fed meeting than the last the the prospect of another 75 basis point hike is definitely on the table. He made that very clear while also leaving room for the idea that we could see some slowing in the increases as we get towards the end of the year. A lot of course is riding on what we see in the upcoming inflation reports, pal is really waiting for that definitive report that shows one way or the other If we're beginning to see inflation moderate. Mhm. Now Alex I know of course as this press conference continues, pals had a decent amount to say about inflation broadly speaking of course and the goals. But how did the Feds current course of action? How was that working to bring down these super high prices? So with this 75 basis point hike, the Fed target rate is now at two and a quarter between and 2.5. That is generally considered the policy or the point at which policy goes from neutral to potentially restrictive. So any increase beyond this point is now going to be considered restrictive. Which is yeah. Which is key to whether or not we address inflation at the point at which the Fed becomes restrictive is the point at which we may actually see a reaction in terms of the inflation. Right right now, As Fed said today, as pal said today, aggregate demand is still strong. So we haven't yet made a dent. It is interesting. It sounds like you're right. The Fed is going to raise rates by about a full percentage point between now and year. End of course all of this data dependent. But what did the chair have to say about the odds of a recession two straight quarters of economic contraction and how that might influence policy ahead. So obviously multiple reporters sort of hit the chair with this question are we in a recession? Are we in a recession? They asked in about three different ways. He said multiple times. No, I do not think we are. But to use his language he said we will see a period of below trend economic growth and some softening in labor conditions. So I think that you know, depending on who's interpreting that, you know, I think others may say that that could qualify as a recession. The fact that we're seeing these big GDP numbers tomorrow, it's kind of convenient that the Fed can kind of hold judgment because after tomorrow the conversation about whether or whether or not we are in a recession is definitely going to be heating up and I do see a stock still near those session highs as the Fed here does continue to give us some information. Still pretty confident that we could get a softly and dina Alex without any certainty that we're in a recession right now. Cheddar reporter Alex. Hello Alex, thanks so much for breaking down the top headlines with us