WASHINGTON: The Federal Reserve raised interest rates by three-quarters of a percentage point on Wednesday as it continued to battle the worst inflationary streak in 40 years, but signaled that future borrowing costs would rise in smaller steps. can be done The overall tightening of fiscal policy” it has implemented so far.
The new language in the policy statement noted the still-emerging implications that the Fed’s pace of rate hikes is in motion, and the desire to achieve a level for the federal funds rate “to push inflation back to 2 Limited enough to do. % extra time.”
“Continued increases in the target range would be appropriate,” the U.S. central bank said at the end of its latest two-day policy meeting. Without predicting a future decision, officials said, “In determining the pace of future target range increases, the (Federal Open Market) Committee will take into account the overall tightening of monetary policy, along with Policy affects economic activity. And inflation, and economic and financial developments.”
The language acknowledges the broader debate surrounding Fed policy tightening, its impact on the U.S. and global economies, and the risk that continued rate hikes could strain the financial system or trigger a recession.
While its recent rapid rate of hikes has been couched in the name of “stepping up” to hold inflation to more than three times the Fed’s 2% target, the central bank is now entering a more critical phase – rather than “fine-tuning” front-loading.”
The policy decision set the target federal funds rate between 3.75% and 4.00%, the highest since early 2008. Fed Chair Paul Volcker’s fight to control inflation in the 1970s and 1980s.
The Fed’s statement said officials remained “very attentive to inflation risks,” opening the door to further hikes.
The economy, the Fed noted, is still growing modestly, with “strong” job gains and low unemployment.
Fed Chair Jerome Powell will outline the central bank’s plans and outlook at a news conference starting at 2:30 p.m. EDT (1830 GMT).
