The U.S. Federal Reserve on Wednesday raised its short-term borrowing rate by 0.75 percentage point, taking its target range to 3.75%-4%, the highest since January 2008.
The move was Fed’s fourth consecutive three-quarter point rate hike, following the decision in June, July and September. However, the Fed’s chairman Jerome Powell sent some signals of how the central bank will approach monetary policy to bring down inflation.
In the future monetary policy decision, the Fed 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.
However, Powell dismissed the idea of pausing the hike soon, but will discuss a possibility of slowing the pace down at the next meeting or two.
