The US central bank raised its target rate by a quarter of a percentage point on Wednesday, promising a “continued increase” in borrowing costs as part of the ongoing fight against inflation.
“Inflation has eased somewhat but is still rising,” the Federal Reserve said in a statement, making clear progress toward slowing the pace of inflation from last year’s 40-year high. admitted to
For example, Russia’s war in Ukraine is still seen as contributing to “increased global uncertainty,” the Fed said. However, policymakers have removed language in previous statements that cited war and the COVID-19 pandemic as direct drivers of price increases.
Still, the Fed said the U.S. economy was enjoying “moderate growth” and “robust” job growth, and that policymakers were still “very careful about inflation risks.”
“[The Federal Open Market Committee]believes continued increases in the target range are appropriate to achieve a monetary policy stance that is sufficiently restrained to bring inflation back to 2% over time,” the Fed said. I expect there will be,” he said.
But to keep its promise of further rate hikes, the Fed is prepared to flag the end of the current tightening cycle, agreeing to the fact that inflation has been steadily declining for six months, contrary to investor expectations. is made.
It’s also a departure from the Bank of Canada’s forecast last week, which suggested the Bank of Canada raised interest rates to 4.5% but may be content to keep them there.
