‘SOUND AND RESILIENT’

Fed Hikes Key Interest Rate by a Quarter-Point Despite Banking Crisis

It marks the ninth consecutive rate hike since last March, with chair Jerome Powell warning that a “bumpy” road lies ahead in combating high inflation.

The Federal Reserve is raising its key interest rate by 0.25 percent in an effort to fight inflation despite the recent shock waves that have rattled the banking system, it said Wednesday. The announcement of the unanimous decision marks the ninth consecutive rate hike since last March, and puts the key benchmark federal funds rate at a range of 4.75 to 5 percent, the highest since 2007. In a post-meeting statement, the Fed signaled that such rate increases could soon end, though the Federal Open Market Committee will continue to monitor incoming data. “The U.S. banking system is sound and resilient,” the committee said. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.” At a press conference later, Fed chair Jerome Powell said, “The process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”