Economy
Federal Reserve lifts interest rates to 3.75%-4%
The Federal Reserve raised its benchmark interest-rate target by 25 basis points, citing elevated inflation and resilient economic activity.
What happened
The Federal Open Market Committee voted unanimously, 12-0, to raise the federal funds rate target range by 25 basis points to 3.75%-4%. The Committee said economic activity is expanding at a solid pace, supported by resilient domestic spending, strong productivity growth and robust capital investment. Job gains have kept pace with the workforce, while the unemployment rate has changed little. Inflation remains elevated. The Fed said the decision supports a timelier return to its 2% inflation goal and confirmed it will continue maintaining ample reserves in the banking system.
Why it matters
Higher short-term borrowing costs remain in place as the Fed prioritises bringing elevated inflation back to its 2% goal. The decision also confirms continued ample banking-system reserves.
Source: U.S. Federal Reserve