The U.S. Federal Reserve has lifted its trendsetting interest rate another 25-basis points, or quarter percentage point, to a range of 4.50% to 4.75% as it continues to try and lower inflation.
In prepared remarks, U.S. Federal Reserve Chair Jerome Powell said he expects to deliver a “couple” more interest-rate increases before pausing the tightening cycle to assess its impact on the American economy.
The latest rate hike marked the eighth consecutive time that the U.S. Fed has raised interest rates to bring down inflation that is currently at an annualized 6.50% in America.
However, the latest 25-basis point increase was the smallest interest rate hike yet from the U.S. Fed, which raised rates by 50-basis points and 75-basis points at its two previous meetings.
The vote to raise interest rates by 25-basis points this time was unanimous among members of the Federal Open Market Committee.
During a press conference with media after the decision, Powell said: “We’ve raised rates four and a half percentage points, and we’re talking about a couple of more rate hikes to get to that level we think is appropriately restrictive.”
No new forecasts were provided with the latest interest rate increase. At its previous policy meeting last December, the U.S. Fed forecast that they’ll increase rates to 5% or above this year, with no expectation of an interest rate cut.
Stocks rallied following the latest interest rate decision by the Fed, with the technology laden Nasdaq index closing 2% higher on the day.
