United States Federal Reserve has raised interest rates for the first time since 2018 as it approved a rate hike of 0.23 percent or 25 basis points. The announcement came at the end of the two-day meeting of the policy making Federal Open Market Committee (FOMC).
The Federal Reserve also laid out an aggressive plan to push borrowing costs to restrictive levels next year in a move aimed at battling the coronavirus pandemic, countering the economic risks posed by excessive inflation and the war in Ukraine among other issues.
Most of the US policymakers now see the federal funds rate rising to a range between 1.75 percent and 2 percent by the end of 2022. Last night’s rate hike is also the first of six hikes to come this year. The rate hike will have an immediate effect on consumer borrowing and credit. Fed officials also forecast three additional hikes in 2023, boosting its benchmark rate to 2.8 percent.