Fed inches interest rates up another quarter percentage point
The Federal Reserve on Wednesday approved a quarter-percentage-point increase in a key U.S. interest rate and signaled its not ready to back off in its fight against inflation, repeating its view that ‘ongoing increases’ will be needed.
The Fed on Wednesday lifted its benchmark short-term rate to a range of 4.5% to 4.75%. The decision followed six larger rate hikes in a row as the Fed stepped up its fight to quench the worst bout of inflation in 40 years. “The [Federal Open Market 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 percent over time,” the statement read.
In December, the bank’s interest-rate setting panel forecast that its’ benchmark rate would top out around 5% to 5.25%. That suggests at least two more rate hikes of a quarter point. To be sure, the economy has softened. Hiring has slowed for five straight months and hiring in January may have been the weakest in two years. A variety of other indicators also point to spreading weakness.
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