U.S. Central Bank Raises Benchmark Interest Rate Again

U.S. Central Bank Raises Benchmark Interest Rate Again

The U.S. Federal Reserve has raised its benchmark interest rate again, citing modest economic expansion in the first quarter of the year. While unemployment has remained low, inflation continues to be a concern for the central bank. In its press release, the Federal Open Market Committee (FOMC) emphasized the soundness and resilience of the U.S. banking system.

The FOMC is committed to lowering inflation to the 2% range and, in support of this goal, raised the target range for the federal funds rate to 5 to 5-1/4 percent. The announcement caused all four major U.S. benchmark stock indexes to rise, as well as a modest increase in precious metals and cryptocurrency markets. However, investors were still waiting to hear from Fed chairman Jerome Powell regarding future rate changes.

While some analysts predict that the Fed will cut the benchmark rate, the FOMC anticipates that additional policy firming may be necessary to achieve the 2% inflation target. The committee did not provide details on whether the rate will remain unchanged at the next meeting in June.

During a press conference, Powell addressed the U.S. debt limit and expressed hope for a resolution. The Fed believes that failure to raise the debt limit could cause financial disruption. Powell also stated that the central bank is prepared to take further monetary policy action if necessary.

The Fed’s continued commitment to reducing inflation is a testament to its unwavering dedication to maintaining the soundness and resilience of the U.S. banking system. With the benchmark rate raised once again, investors will be keeping a close eye on future decisions made by the central bank.


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