US Federal Reserve Adds Another 25 Basis Points, Bringing Rates to 5% Peak
18:03 GMT 22.03.2023 (Updated: 18:47 GMT 22.03.2023)
© Chris WattieThe Federal Reserve building is pictured in Washington, D.C., U.S., August 22, 2018.
© Chris Wattie
WASHINGTON (Sputnik) - The Federal Reserve announced on Wednesday that it raised the interest rate for another 25 basis points, bringing it to a peak of 5%.
"The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run," the Fed said, referring to its Federal Open Market Committee (FOMC).
The Fed has added 450 basis points to the interest rate over the past year to bring under control inflation that hit four-decade highs of more than 9% per year in the aftermath of the coronavirus pandemic measures. The central bank has said it aims to bring inflation back to its long-standing target of 2%.
"In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent," the Fed said, adding that it expected "additional policy firming" as appropriate to achieve its goal on inflation.
The Federal Reserve also said it is strongly committed to continue fighting inflation, but expects additional policy firming.
"The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time," the Federal Reserve said in a report.
Furthermore, the Federal Reserveupgraded the US inflation forecast for 2023 to 3.3% from 3.1%.
Moreover, the Federal Reserve kept its inflation outlook for 2024 at 2.5%, according to its Federal Open Market Committee (FOMC).