US Fed hikes interest rates by 25 basis points

ISTANBUL

The US Federal Reserve on Wednesday raised its benchmark interest rate by 25 basis points as part of its fight against inflation.

The Federal Open Market Committee (FOMC) unanimously decided to raise the target range for the federal funds rate to between 4.5% and 4.75%.

In seven hikes, the US central bank raised the rate by a total of 425 points last year.

“Inflation has eased somewhat but remains elevated,” the FOMC said in a statement.

“Russia’s war against Ukraine is causing tremendous human and economic hardship and is contributing to elevated global uncertainty.”

The Fed’s aggressive monetary tightening is a result of record consumer and producer prices, which are still hovering around their highest level in 40 years.

Annual consumer inflation in the US came in at 6.5% in December, easing from 7.1% in November, while producer inflation dropped to 6.2% in December from November’s 7.3%.