FOMC meeting update

Gary Pzegeo, CFA

July 28, 2022

A summary of the Federal Reserve's July 2022 meeting

July 27, 2022

The Federal Reserve raised interest rates by 0.75%, repeating the action taken at their June meeting. The current target range is now 2.25% to 2.50%.   

Current Conditions  

The Fed’s assessment of current conditions recognized weaker economic data since their last meeting. The first line of the Fed’s statement noted a slowdown in spending and production. The Fed does not appear ready to shift its focus away from fighting inflation and toward supporting growth. Job gains were described as “robust” and the statement continues to highlight broad price pressures. Language covering the Fed’s concerns with China’s COVID policies was dropped from today’s statement.

Forward Guidance

The FOMC repeated its expectation that ongoing increases in the policy rate would be appropriate.  Markets will focus on Chairman Powell’s press conference for clues on the size of the Fed’s next move. In June, he noted that today’s decision could be an increase of 0.5% or 0.75%. Higher than expected inflation data seems to have pushed the Committee to today’s larger increase.

Policy/Market Reaction

Today’s move was unanimously approved by the Committee. The last meeting included one dissenting vote in favor of a smaller rate hike. Markets had discounted an increase of 0.75% at this meeting for several weeks and briefly expected a more aggressive rate increase following the release of June inflation data. Federal Funds contracts priced to coincide with the next FOMC meeting in September discount an increase of at least 0.50%. Rates, currencies and equities were little change immediately following the release.


Gary Pzegeo, CFA  joined the firm in 2007 as head of fixed income, focusing on portfolio management, trading, policy formulation and client service.