The Fed Again Raises Interest Rates 0.25 Percent, So Highest In 2 Decades

US Dollar Illustration (Photo: Doc. Antara)

JAKARTA - The Central Bank of the United States, the Federal Reserve raised the benchmark interest rate by 25 basis points to the range of 5.25 percent to 5.5 percent. This is the highest level in more than two decades, as it continues to increase its struggle against inflation.

This is the 11th rate hike since the Fed started an aggressive interest rate hike campaign in March 2022, bringing federal interest rates to their highest level since early 2001.

"Indicators have recently shown that economic activity has grown at moderate speeds. Job gains have been strong in recent months, and unemployment rates remain low. Inflation remains high," said a Federal Open Market Committee (FOMC) statement, Fed policy regulatory agency following a two-day policy meeting.

"FOMC is trying to achieve maximum work and inflation at the level of 2.0 percent in the long term. To support this goal, the committee decided to increase the range of federal interest rate targets to 5.25-5.50 percent," the statement quoted Antara as saying.

In addition, FOMC said it would continue to reduce its ownership of government securities and agency debt as well as agency mortgage-backed securities, as described in previously announced plans.

"The committee is very committed to returning inflation to a target of 2.0 percent," he added.

The latest economic indicators show that the US consumer price index has slowed to 3.0 percent year-on-year in June, the lowest since March 2021, but is still above the central bank's target range of 2.0 percent.

The Fed suspended interest rates at a policy meeting last month, after ten consecutive gains since March 2022.