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| The Fed raised interest rates to a 22-year high. (Source: Reuters) |
This is the 11th interest rate hike in the last 12 meetings of the Fed, raising the US central bank's benchmark interest rate to around 5.25-5.50%, the highest level since 2001.
In a statement released on July 26, the Fed's Federal Open Market Committee (FOMC) said it will continue to evaluate additional information and its implications for monetary policy.
The central bank also said it would monitor incoming data and study the impact of rate hikes on the economy "in determining the appropriate level of additional policy consolidation" to achieve its 2% inflation target.
The Fed described inflation as still rising and job growth as still strong, while upgrading its description of economic growth from the "modest" level given at the June 2023 meeting to "moderate".
"The banking sector is healthy and resilient. Tight credit is expected to continue to weigh on the U.S. economy following the failure of several banks earlier this year," the agency said.
The June 2023 consumer price report showed that US inflation had eased to 3% from a peak of 9.1% last year, with Fed policymakers continuing to express concern about core inflation, which excludes food and energy, which has declined more slowly.
The US central bank also pointed out that inflation in the service sector in particular remained high due to a tight labor market.
The FOMC will have its next meeting on September 19-20.
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