## [# Fed Gears Up for Last Rate Hike of This Cycle](/sections/features/fed-gears-last-rate-hike-cycle)
# Fed Gears Up for Last Rate Hike of This Cycle
The U.S. central bank will make its next monetary policy decision this Wednesday.
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[By Sumit Roy ](/authors/sumit-roy)
May 01, 2023
Edited by: Lisa Barr
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This week’s Federal Open Market Committee meeting could be a big one. I know, I know—people have been saying that about pretty much every meeting since the Fed started hiking interest rates last March, but this one really does hold a special significance.
If market indicators and the Fed’s own economic projections are to be believed, the 25 basis point interest rate hike that we are likely to see on Wednesday could be the last one of this cycle.
It would bring the range for the fed funds rate up to 5% to 5.25%, putting an end to the fastest period of monetary policy tightening in over four decades.
For context, the fed funds rate was zero as recently as March of last year.
In other words, if the Fed hikes rates this week as expected, it will have raised rates by 500 basis points in less than 14 months.
The enormity of the Fed’s actions is a reflection of how out of hand inflation got in 2021 and 2022. And to be sure, the Fed’s inflation-fighting job still isn’t over.
The core PCE—the central bank’s preferred measure of inflation—grew at a 4.6% year-over-year pace in March, down from 2022’s 5.3% peak, but it’s still well above the Fed’s 2% target.
The central bank hopes that the lagged effects of the Fed’s rate hikes, along with a potential pullback in regional bank lending, will do the rest of the work in bringing inflation lower.
If not, the central bank may have to resume its rate hikes later in 2023 or 2024, something that would likely have disastrous consequences for the U.S. economy.
Until then, investors can breathe a sigh of relief that, at least so far, the U.S. economy has escaped without taking too much damage after a whirlwind year of nonstop rate hikes.
*Follow Sumit Roy on Twitter* @sumitroy2
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[ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy)
Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including… [View Bio](/authors/sumit-roy)
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