Washington [US], September 22 (ANI): The US Federal Reserve has yet again raised key interest rates in its fight against red-hot inflation in the country. The key policy rate was raised by 75 basis points to 3.0-3.25 per cent -- which is the third consecutive hike of the same magnitude.
The US central bank seeks to achieve maximum employment and inflation at the rate of 2 per cent over the long run and it anticipates that the ongoing hikes in the target range will be appropriate.
"In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals," the US central bank said in a statement.
Consumer inflation in the US though declined marginally in August to 8.3 per cent from 8.5 per cent in July but is way above the 2 per cent goal. Several senior officials in the US central bank Federal Reserve recently said that another interest rate hike is imminent during the two-day monetary policy meeting that will start on September 20.
Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
The US Fed statement added that the Committee's futures assessments would consider a wide range of information, including readings on public health, labour market conditions, inflation pressures and expectations, and financial and other international developments.
"Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labour market conditions that benefit all," the central bank's Chair Jerome Powell in his opening statement after the latest monetary policy review meeting.
Powell added the central bank was moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 per cent.
"We are highly attentive to the risks that high inflation poses to both sides of our mandate, and we are strongly committed to returning inflation to our 2 per cent objective," Powell said later in his opening statement.
On slowing the pace of rate hikes, the Chair said: "At some point, as the stance of monetary policy tightens further, it will become appropriate to slow the pace of increases, while we assess how our cumulative policy adjustments are affecting the economy and inflation."He added restoring price stability will likely require maintaining a restrictive policy stance for some time and a historical record cautions strongly against prematurely loosening policy.
"We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply," Powell added.
Notably, the country's economy is currently in a technical recession.
Meanwhile, real gross domestic product (GDP) in the US declined consecutively for the second quarter of 2022 (April-June). A technical recession is often defined as two consecutive quarters of negative growth in the real GDP. (ANI)