The United States Federal Reserve (Fed), on Wednesday, raised its benchmark interest rate by 25 basis points to a target range of 4.5 percent to 4.75 percent.
This is the eight consecutive increase by the US central bank since March 2022 as it attempts to curb inflation.
In a statement issued after a two-day meeting, the bank’s federal open market committee (FOMC) said inflation has eased somewhat, but remains elevated.
It further warned that “ongoing increases” would be needed to bring inflation under control.
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“The committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” the statement reads.
“In support of these goals, the committee decided to raise the target range for the federal funds rate to 4-1/2 to 4-3/4 percent.
“The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
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In determining the extent of future increases in the target range, the committee said it would take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial development.
FOMC also said it would continue to reduce its holdings of treasury securities and agency debt and agency mortgage-backed securities.
“In assessing the appropriate stance of monetary policy, the committee will continue to monitor the implications of incoming information for the economic outlook,” the statement adds.
“The committee would be prepared to adjust the stance of monetary policy as appropriate, if risks emerge that could impede the attainment of the committee’s goals.
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“The committee’s assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.”
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