The Federal Reserve raised its benchmark policy rate by 0.75 percentage point and said another adjustment of that size was possible at its next meeting, part of an aggressive plan to tighten monetary policy in the coming months as the central bank confronts the highest US inflation in 40 years.
At the end of its two-day policy meeting, the Federal Open Market Committee on Wednesday lifted its benchmark policy rate to a new target range of 1.50 per cent to 1.75 per cent, noting in a statement that it “anticipates that ongoing increases in the target range will be appropriate”.
The decision marks an abrupt pivot from the Fed’s previously telegraphed plans for a second consecutive 0.50 percentage point rate rise, which had been explicitly signalled by policymakers before the start of a scheduled “blackout” period ahead of the meeting during which their public communications are limited.