Federal Reserve Hikes Rates 25 Basis Points, Hints At More Future Increases

As widely expected, the Federal Reserve hiked borrowing costs another 25 basis points, wrapping up its two-day policy meeting and bringing the fed funds rate to a range between 4.5% and 4.75%.

Interest rates are now sitting at the highest since October 2007, and Fed officials indicated they will continue to keep raising them until inflation returns to the 2% target range— pending incoming economic data, of course. “In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” read the FOMC statement.

“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” policy makers added. The Fed reiterated its observations that employment levels remain robust, and growth in spending and production remains modest.

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