FED RAISES RATES BY 25Bps

• The Federal Reserve ended up hiking interest rates by 0.25%, as expected, bringing the Fed Funds target rate to 5.25% - 5.50%.
• The central bank noted that it remains committed to returning inflation to its 2% objective.
• Bitcoin price observed no significant reaction as it continued to trade above $29,300.

The Federal Reserve lived up to its promise of raising interest rates despite hitting a pause at the last meeting. The Federal Open Market Committee (FOMC) today announced a 0.25% rise in the Fed Funds target rate to 5.25-5.50%. In its policy statement, the Fed reiterated that policymakers would continue to assess incoming data in terms of its implications for policy moving forward.

The rate hike brought interest rates in the US to a 22-year high, as the last time they stood at these levels was back in January 2001. In line with the hike, the United States central bank stated -  in determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, 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.

The Committee also stated that it would continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities. The FOMC reiterated that it remains strongly committed to returning inflation to its 2 percent objective.