The US Federal Reserve raised its target interest rate by a quarter of a percentage point on Wednesday, yet continued to promise "ongoing increases" in borrowing costs as part of its still unresolved battle against inflation, Trend reports citing Reuters.
"Inflation has eased somewhat but remains elevated," the U.S. central bank said in a statement that marked an explicit acknowledgement of the progress made in lowering the pace of price increases from the 40-year highs hit last year.
"The (Federal Open Market) Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time," the Fed said.
Fed Chair Jerome Powell wasted little time emphasizing that recent progress on inflation - while "gratifying" - is still insufficient to signal an end to the rate hikes.
"We will need substantially more evidence" that inflation is ebbing to be confident that it's moving back toward the target," Powell said at a news conference following the end of the two-day policy meeting.
The Fed's policy decision lifted the benchmark overnight interest rate to a range between 4.50% and 4.75%, a move widely anticipated by investors and flagged by U.S. central bankers ahead of the meeting.
But in keeping the promise of more rate hikes to come, the Fed pushed back against investor expectations that it was ready to flag the end of the current tightening cycle as a nod to the fact that inflation has been steadily declining for six months.
The statement did indicate that any future rate increases would be in quarter-percentage-point increments, dropping a reference to the "pace" of future increases and instead referring to the "extent" of rate changes.