The U.S. Federal Reserve (Fed) announced the fourth straight 0.75-point rate hike on Wednesday and signaled that more hikes would be necessary to tame inflation.
The latest three-quarter percentage point increase takes the benchmark lending rate to 3.75-4.0%, the highest since January 2008.
In a statement at the conclusion of its two-day policy meeting, the U.S. central bank said more rate hikes “will be appropriate” to achieve a “sufficiently restrictive” level to tamp down inflation, but it will consider the impact on the economy when deciding.
The Fed’s aggressive rate hikes this year so far have not had a noticeable impact on prices, but increase the risk the U.S. economy could suffer a recession even as the job market remains strong.
The policy-setting Federal Open Market Committee (FOMC) signaled that more increases will be needed to tamp down rising prices but it will consider the impact on the economy when deciding on the pace of future moves – opening the door to the possibility it will implement smaller steps in coming months.
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