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Fed Hikes Interest Rates By 75 Basis Points Again

BY JOHN CARNEY

 

The Federal Reserve on Wednesday raised its benchmark interest rate target by three-quarters of a percentage point.

The Federal Open Market Committee, which sets interest rate policy, said its target rate for overnight interbank funding would rise to a range of 2.25 percent to 2.5o percent, up from the 1.50 to 1.75 percent the Fed set last month. In addition, the Fed said it would raise the rate it pays on reserve balances to 2.40 percent.

The Fed took notice in its statement of recent evidence that the economy has slowed.

“Recent indicators of spending and production have softened,” the Fed said. “Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”

The Fed singled out Russia’s invasion of Ukraine as contributing to inflation.

 

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