Fed Dramatically Hikes Inflation Projection In Much-Awaited Meeting, Will Not Taper Stimulus

The Federal Reserve hiked its inflation expectations while not backing down from aggressive monetary stimulus.

The central bank insisted during its much-anticipated June meeting that inflation is “transitory” in nature as the United States emerges from COVID-19 and the lockdown-induced recession. Although the Federal Open Market Committee intends to aim for stable inflation rates in the long term, it increased inflation projections for 2021 to 3.4% — an entire percentage point higher than its March forecast.