The Federal Reserve announced another hike in the federal funds rate that brings it to a 22-year high.
The central bank’s policymaking Federal Open Market Committee (FOMC) voted unanimously on a quarter-percent increase that brings the rate range to 5.25% to 5.5%. In making the decision, the Fed stated that “tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.”
The FOMC hinted at additional hikes, pointing to “the extent of additional policy firming that may be appropriate to return inflation to 2% over time.”
The FOMC also said it would “continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2% objective.”
The central bank has enacted 10 consecutive increases between March 2022, when rates were raised from near zero, through last month when rates remained unchanged.