The U.S. Federal Reserve announced that it has raised its benchmark lending rate on Wednesday, amid ongoing inflation and banking crisis in the country.
The quarter-point increase, which was in line with expectations, lifts the target range to 4.75-5.00% at the end of a two-day policy meeting.
In a statement, the Fed said recent banking sector developments “are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation.”
The policy-setting Federal Open Market Committee (FOMC) added that “some additional policy firming may be appropriate” to get to a stance that is sufficiently restrictive to bring inflation down.
The latest increase was the same size as the central bank’s previous rate decision in February.
It comes after two weeks of market turmoil following the collapse of three regional lenders.
Wednesday’s decision underscores the Fed’s determination to tackle inflation, which remains stubbornly above policymakers’ long-term annual target of 2% despite an effort to lower price increases.
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