Federal Reserve officials expect to hike rates roughly six additional times this year, bringing its benchmark interest rate to nearly 2%, according to projections released Wednesday.
The median member of the Federal Open Markets Committee expects the Fed Funds rate to be 1.9% at the end of the year, according to the release. On Wednesday, the central bank raised its target range to be between 25 and 50 basis points. A basis point is equal to 0.01%.
The committee’s previous projections, released following a meeting in mid-December, showed the majority of members expected three total hikes in 2022.
That would have brought the Fed funds rate to between 75 and 100 basis points. Just two committee members projected the rate to rise above 1% this year.
However, market expectations have moved toward more hikes in recent months as inflation has remained high and central bankers have signaled a more aggressive stance.
As of midday Wednesday, markets implied seven total 25-basis point hikes by the end of the year as the most likely outcome, according to the CME FedWatch Tool. The latest CNBC Fed Survey showed that respondents expected an average of 4.7 hikes this year.
While the Fed is expected to mostly stick to 25-basis point hikes, it could choose to go up 50-basis points or more in one step.