The Federal Open Market Committee released its post-meeting statement Wednesday on what it will be doing with interest rates.
The Federal Reserve on Wednesday enacted its second consecutive 0.75 percentage point interest rate increase as it seeks to tamp down runaway inflation without creating a recession.
"Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low," the committee added, using language similar to the June statement. Officials again described inflation as"elevated" and ascribed the situation to supply chain issues and higher prices for food and energy along with"broader price pressures.".
The efforts to bring down inflation are not without risks. The U.S. economy is teetering on the brink of a recession as inflation slows consumer purchases and dents business activity. The balance sheet has declined just $16 billion since the beginning of the roll-off, though the Fed set a cap of up to $47.5 billion that potentially could have been wound down. The cap will rise through the summer, eventually hitting $95 billion a month by September. The process is known in markets as"quantitative tightening" and is another mechanism the Fed uses to impact financial conditions.
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