Fed hikes interest rates to 22-year high as inflation fight resumes
Wall Street is focused on Powell's comments as investors look for additional clues about what comes next in the central bank's inflation fight.
The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter of a point, resuming its campaign to increase borrowing costs and crush inflation after a brief pause in June.
The unanimous decision puts the key benchmark federal funds rate at a range of 5.25% to 5.5%, the highest since 2001, further restricting economic activity as the borrowing costs for homes, cars and other items march higher.
It marks the 11th rate increase aimed at combating high inflation since policymakers began tightening in March 2022.
Policymakers also left the door open to additional interest rate increases this year, despite a recent pullback in inflation.
SILVER LINING OF HIGHER INTEREST RATES: SAVINGS ACCOUNT RATES
«The Committee will continue to assess additional information and its implications for monetary policy,» the post-meeting statement said. It was nearly identical to the statement released by the U.S. central bank in June.
«In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.»
Economic projections laid out after the Fed's June meeting show that a majority of Fed officials expect rates to rise to 5.6% by the end of 2023, suggesting at least one more quarter-point increase this year.
AMERICANS EXPECT HIGH INFLATION TO STICK AROUND IN LATEST NEW YORK FED SURVEY
The Fed is scheduled to meet three more times
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