US Fed hikes benchmark interest rates by 0.5 basis points to 4.4%

The Committee anticipates that ongoing increases in the target range will be appropriate to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 per cent over time. In determining the pace of future increases in the target range, the Committee will consider the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments, the Fed said in a Federal Open Market Committee (FOMC) statement.

In addition, the Committee will continue reducing its holdings of treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May.

Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia's war against Ukraine is also causing tremendous human and economic hardship. The war and related events are contributing to upward pressure on inflation and are weighing on global economic activity, the statement added.

ALCHEMPro News Desk (KD)