Fed Raises its Rates

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On Wednesday, the Federal Reserve shifted to a new stage of post-pandemic economic recovery management, taking what may be the last step in its historic series of interest rate hikes.

The central bank raised its benchmark overnight interest rate to a range of 5.00%-5.25%, while dropping language saying that further rate increases would be needed.

Chair Jerome Powell noted that it is now an open question whether additional increases are warranted, given the current high inflation and signs of a slowdown. He said that inflation is the chief concern, and that the Fed will evaluate policy decisions on a meeting-by-meeting basis.

Furthermore, the Fed will also consider the accumulated impact of monetary policy on the economy, as well as the effects of a potential credit tightening in the wake of the recent failure of three US banks.

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