The Fed raises rates 25 basis points in March to 5% and anticipates that further tightening may be necessary

The Federal Reserve The United States has met market expectations in its March monetary policy announcement, raising interest rates by 25 basis points from 4.75% up to 5%. This is the ninth consecutive rate hike, reaching its highest level since August 2007.

FOMC statement

Recent indicators point to moderate growth in spending and output. Job creation has picked up in recent months and is running at a solid pace; the unemployment rate has remained low. The inflation remains high.

He US banking system is strong and resilient. Is Recent events are likely to lead to tighter credit conditions for households and businesses, weighing on economic activity, hiring and inflation. The extent of these effects is uncertain.. The Committee remains very attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at a rate of 2% in the long term. In support of these targets, the FOMC decided to raise the target range for the federal funds rate from 4.75% to 5%. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that additional policy tightening may be appropriate in order to achieve a monetary policy stance that is tight enough to return inflation to 2%. over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as outlined in its previously announced plans. The Committee is firmly committed to bringing inflation back to its 2% target.

In assessing the appropriate monetary policy stance, the Committee will continue to monitor the implications of incoming data for the economic outlook. The Committee would be prepared to adjust the monetary policy stance accordingly if risks arise that could prevent the achievement of the objectives. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflationary pressures and inflation expectations, and financial and international developments.

They voted for the monetary policy action unanimously: Jerome H. Powell, President; John C. Williams, Vice President; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K Logan; and Christopher J. Waller.