The Federal Reserve lifted interest rates again on Wednesday, reaffirming its commitment to achieving a 2% annual rate of inflation. “We’ve covered a lot of ground and the full effects of tightening have yet to be felt,” Fed Chair Jerome Powell said following the unanimous decision by policymakers. The bank raised its benchmark lending rate by 25 basis points, to between 5.25% and 5.50% — the highest level in 22 years. The move, following a pause in June, is the 11th increase since last March. The U.S. Consumer Price Index, meanwhile, has dropped to an annual rate of 3% in June from a year-earlier peak of 9.1%.

  • The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures Price Index, will be released for June in a report Friday.
  • The central bank also said Wednesday that, while inflation is still “elevated,” growth is “moderate” — up from “modest” at its last meeting.
  • It repeated that the banking industry is “sound and resilient” following the failure of three lenders earlier this year.

 

By Cate Chapman, Editor at LinkedIn News

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Fed raises interest rates following June pause

The Federal Open Market Committee raised the main interest rate by a quarter percentage point after a two-day meeting.

U.S. Federal Reserve Board Chairman Jerome Powell speaks during a June 2023 news conference.
U.S. Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee (FOMC) at the headquarters of the Federal Reserve on June 14, 2023 Drew Angerer via Getty Images

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