Fed Raises Rates by Quarter Point, Hints at End to Increases Soon

The Federal Reserve Board on Wednesday said its Federal Open Market Committee (FOMC) will raise the target range for the federal funds rate to a range of 4.75% to 5%. The increase marks the Fed’s second consecutive rate hike of a quarter percentage point following five consecutive larger ones.

“The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” the Fed said in its FOMC statement.

That wording represented a softening of the hawkish stance the nation’s central bank has taken previously to increasing the federal funds rate, with earlier statements saying that “ongoing” increases would be appropriate to meet the Fed’s goal of brining inflation down to a range of 2%.

“The U.S. banking system is sound and resilient,” according to the FOMC statement. “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.”