(Finance) – The Federal Reserve not surprising the market and raises key interest rates by 25 basis points (bp) to 4.50-4.75%, thus slowing down with respect to the 50 bps increase implemented in December. The FOMC provides that “i continuous increases of the target range will be appropriate to achieve a monetary policy stance restrictive enough to bring inflation back to 2% over time”, reads the statement released at the end of the two-day meeting.
Central bankers highlight that “recent indicators point to modest growth in spending and output. Job gains have been robust in recent months and the unemployment rate has remained low. Theinflation has declined slightly, but remains high“.
“Russia’s war against Ukraine is causing enormous human and economic hardship and contributing to high global uncertainty – it added – The Committee is very attentive to the risks of inflation“.
It is emphasized that, in determining the size of future increases in the target range, the FOMC “will take into account the cumulative tightening monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments”.
No surprises from quantitative tightening (QT) either. The FOMC “will continue to reduce its holdings of treasuries and debt securities agencies and agency mortgage-backed securities, as described in its previously announced plans,” the statement read.