The Federal Reserve raises interest rates by 25 basis points and expects to raise rates again at least once this year

The Federal Reserve announced its interest rate decision, raising the target range for the federal funds rate by 25 basis points to 3.75% -4.00%. This is the first interest rate hike since July 2023. Among 18 officials, 16 expect to raise interest rates at least once before the end of 2026. The median path shows that after another increase this year, interest rates will remain unchanged in 2027 and gradually decrease thereafter. The next FOMC meeting is expected to be held at the end of October. (Source: Federal Reserve) AI interpretation: This interest rate hike decision clarifies the Fed's firm stance on maintaining a tightening cycle. The consensus among officials on the future path of interest rates has strengthened the long-term trend of a high interest rate environment. The market must recalibrate its expectations for a shift in monetary policy, and liquidity pressures will continue to exist in the short term. This decision has completely ended the market's illusion of short-term interest rate cuts, and the asset pricing logic will shift towards defensive allocation.