 "US Fed decides unanimously to hike key benchmark rates by 25 bps")
US Federal Reserve on Wednesday raised interest rates by 25 basis points (25 bps) or 0.25 per cent s widely expected and hinted that it may pause further increases.
According to the statement released by Federal Open Market Committee (FOMC) chaired by Jerome Powell, Chair of the Federal Reserve of the United States, the decision to rise the key benchmark rates was "unanimous".
According to the statement released by Federal Open Market Committee (FOMC) chaired by Jerome Powell, Chair of the Federal Reserve of the United States, the decision to rise the key benchmark rates was "unanimous".
Accordingly, the central bank led by chair Jerome Powell has raised the target range for the federal funds rate to 5 to 5-1/4 per cent. FOMC said, it is prepared to adjust the stance of monetary policy as appropriate if risks emerge.
Fed continues on its path of achieving maximum employment and inflation rate of 2 per cent. "In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective," read FOMC statement.
FOMC further said, "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments."
FOMC consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.