US Fed raises interest rates by 25 bps, cautions of more hikes

02 Feb '23

1 min read

Pic: Shutterstock

The US Federal Reserve (Fed) recently raised its benchmark interest rate by 25 basis points to a target range of 4.5-7.5 per cent—the eighth consecutive rise by the central bank since March last year. Inflation has eased somewhat but remains elevated, the Fed’s Federal Open Market Committee (FOMC) said, cautioning that ongoing increases would be needed to control inflation.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run,” the statement said.

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 per cent over time,” the statement said.

In determining the extent of future increases in the target range, the committee said it would take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial development.

The Committee would also continue reducing its holdings of treasury securities and agency debt and agency mortgage-backed securities.

Fibre2Fashion News Desk (DS)

More Textiles News - United States Of America...