Fed hikes interest rates to 16-year high
Updated 5/3/2023 9:27:00 PM
Arab Finance: The US Federal Reserve has raised interest rates to the highest level since 2007 to cool down soaring inflation, according to a Federal Open Market Committee (FOMC) statement on May 3rd.
The Fed hiked the key interest rate by 0.25% for the 10th time in 14 months to hit 5%.
The statement added that the committee remains very concerned about the risks of inflation, which remains high, noting that economic activity in the US expanded at a modest pace in the first quarter of this year, while job creation was strong in recent months, and the unemployment rate remained low.
The committee will continue to monitor the implications of the data received on economic expectations and will be ready to adjust the position of monetary policy appropriately if risks arise that may impede the achievement of its objectives by returning inflation to the target level of 2%.
"We are no longer saying that we anticipate" further rate hikes, Federal Reserve chair Jerome Powell said after the announcement, calling it a "significant change".
On a different note, the US’ Consumer Price Index for All Urban Consumers (CPI-U) rose over the last 12 months to March, according to data from the US Bureau of Labor Statistics.
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