Federal Reserve Raises Interest Rates By Another Three-Quarters Of A Point

(RTTNews) - In a widely anticipated move, the Federal Reserve on Wednesday announced its decision to raise interest rates by 75 basis points.

The Fed said it decided to raise the target range for the federal funds rate to 2.25 to 2.50 percent in an effort to achieve its dual goals of maximum employment and inflation at a rate of 2 percent over the longer run.

The latest rate hike follows another 75 basis point increase in rates last month and marks the fourth straight central bank meeting that has resulted in a rate hike.

In its accompanying statement, the Fed reiterated that it anticipates that ongoing increases in the target range will be appropriate.

The decision to continue raising interest comes even though the Fed acknowledged that recent indicators of spending and production have softened, leading to concerns about a potential recession.

The Fed highlighted continued strength in the labor market and noted that inflation has remained elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

In addition to raising interest rates, the Fed said it would also continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities

The monetary policy decision was unanimous, with Kansas City Fed President Esther George joining her colleagues after favoring a 50 basis point rate hike at the June meeting.

The Fed said it will continue to monitor the implications of incoming information for the economic outlook and remains prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.