WASHINGTON: the Federal Reserve on Wednesday raised interest rates by three-quarters of a percentage point as the country continues to face its worst inflation outbreak in 40 years, but signaled a future increase in borrowing costs could be avoided. follow the smaller steps to account for the “accumulative tightening of monetary policy” it has enacted so far.
The new language in the policy statement noted the still-evolving impact raisedThe rapid pace of rate hikes has begun to kick in, and the desire to raise the federal funds rate is “limited enough to bring inflation back to 2% over time.”
“Continued gains in the target range would be appropriate,” UScentral bank said at the end of its latest two-day policy meeting. While no future decisions have been made, officials said, “When determining the future rate of growth in the target range, the (Federal Open Market) Commission will take into account tightening of monetary policy accumulation, the lags by which monetary policy affects economic activity and inflation, and economic and financial developments.”
The language acknowledges the broad debate that has emerged around the Fed’s tightening of policy, its impact on the US and world economies, and the risk that continued large interest rate hikes could strain the US economy. straighten the financial system or trigger a recession.
Although its recent rapid gains were made in the name of moving “urgently” to catch up with inflation that is tripling over the Fed’s 2% target, the central bank is now stepping into a more nuanced stage – tuning instead of “preloading.”
The policy decision sets the target federal funds rate between 3.75% and 4.00%, the highest level since early 2008. The US central bank has raised interest rates in the last six meetings. began in March, marking the Fed’s fastest round of rate hikes since. Presiding over Paul Volcker’s fight to control inflation in the 1970s and 1980s.
The Fed’s statement said officials remained “particularly attentive to inflation risks,” opening the door for further price hikes.
The Fed noted that the economy looks to be growing modestly, with job growth remaining “strong” and unemployment low.
Fed President Jerome Powell will detail the central bank’s plans and prospects in a press conference scheduled to begin at 2:30 p.m. EDT (1830 GMT).
The new language in the policy statement noted the still-evolving impact raisedThe rapid pace of rate hikes has begun to kick in, and the desire to raise the federal funds rate is “limited enough to bring inflation back to 2% over time.”
“Continued gains in the target range would be appropriate,” UScentral bank said at the end of its latest two-day policy meeting. While no future decisions have been made, officials said, “When determining the future rate of growth in the target range, the (Federal Open Market) Commission will take into account tightening of monetary policy accumulation, the lags by which monetary policy affects economic activity and inflation, and economic and financial developments.”
The language acknowledges the broad debate that has emerged around the Fed’s tightening of policy, its impact on the US and world economies, and the risk that continued large interest rate hikes could strain the US economy. straighten the financial system or trigger a recession.
Although its recent rapid gains were made in the name of moving “urgently” to catch up with inflation that is tripling over the Fed’s 2% target, the central bank is now stepping into a more nuanced stage – tuning instead of “preloading.”
The policy decision sets the target federal funds rate between 3.75% and 4.00%, the highest level since early 2008. The US central bank has raised interest rates in the last six meetings. began in March, marking the Fed’s fastest round of rate hikes since. Presiding over Paul Volcker’s fight to control inflation in the 1970s and 1980s.
The Fed’s statement said officials remained “particularly attentive to inflation risks,” opening the door for further price hikes.
The Fed noted that the economy looks to be growing modestly, with job growth remaining “strong” and unemployment low.
Fed President Jerome Powell will detail the central bank’s plans and prospects in a press conference scheduled to begin at 2:30 p.m. EDT (1830 GMT).
