Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The US banking system is sound and resilient. Recent indicators point to modest growth in spending and production. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated, the Fed’s Federal Open Market Committee (FOMC) said in a statement.

The US Federal Reserve has increased its benchmark interest rate by 25 basis points, marking the ninth consecutive rise since March 2022. This is expected to result in tighter credit conditions for households and businesses, potentially affecting economic activity, hiring, and inflation. The FOMC anticipates that additional policy firming may be necessary.

The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 per cent over time, the statement added.

Fibre2Fashion News Desk (KD)