US hikes rates by 25 bps, key highlights from Fed statement
1 min read 23 Mar 2023, 12:14 AM ISTFOMC decided to raise the target range for the federal funds rate to 4-3/4 to 5%. The Fed statement said the US banking system is sound and resilient
PremiumThe US Federal Reserve in the latest policy on Wednesday decided to take a smaller hike in key interest rates by a quarter of a percentage point continuing its fight against sticky high inflation.
The US central bank also released economic forecasts. Here are the key highlights from the US Fed statement:
- US Fed raises interest rates by 25 bps to 4.9 percent, effective March 23, 2023, as it continues fight against inflation
- The Federal Open Market Committee (FOMC) decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent
Catch live updates on US Fed policy here
- The US banking system is sound and resilient: Fed statement
- Reasons for the hike: “Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated," said the statement.
- Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain.
- The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
- In assessing need for further rate hikes will particularly be focused on actual, expected effects of credit tightening
- Change in language in Fed statement: A shift has been seen away from “ongoing increases" to the policy rate to “some additional firming".
- Officials still project the fed funds rate will end 2023 at 5.1%
