Federal Reserve raises interest rates by 0.25%

Economy

3-05-2023, 23:30

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INA - SOURCES

The Federal Reserve announced Wednesday it was raising its key federal funds rate to more than 5% — a 16-year high — as it continues its firefight against persistent inflation.

In a statement announcing the hike — the 10th-consecutive one since March 2022 — it omitted previous language that signaled more hikes are likely.

While inflation remained elevated, higher borrowing costs for households and businesses "are likely to weigh on economic activity, hiring, and inflation," the central bank said, adding that the extent of these effects "remains uncertain."

It added that job gains had been "robust" in recent months and noted that the unemployment rate remained low.