The 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.
