US Fed raises rates by 25 bps to highest level since 2001
US Federal Reserve raised its lending rate on Wednesday by 25 bps to 5.25-5.5% on the expected lines. This brings US benchmark interest rates to the highest level since 2001 to tackle sticky, high inflation. The Fed chair Jerome Powell also hinted at a possibility of further increases, going ahead.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5-1/4 to 5-1/2 percent," the US central bank policy statement said. The latest statement by Federal Open Market Committee (FOMC) suggests that the central bank may consider another pause at its next meeting in September.
At the previous FOMC meeting in June, the median forecast involved two additional rate hikes this year. The US Fed also said it would assess a range of data points "in determining the extent of additional policy firming", which indicates they see more monetary tightening ahead. Catch live updates on US Fed policy decision The latest quarter percentage-point rise is the Fed's 11th since it began an aggressive campaign of monetary tightening last March in response to rising prices.
“Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S.
Barr; Michelle W. Bowman; Lisa D. Cook; Austan D.
Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J.
Waller," said FOMC statement. Also read: Key takeaways from US Fed policy “In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The
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