On Wednesday, the Federal Reserve Bank took the step of raising interest rates by a quarter of a point in its ongoing efforts to combat inflation. This decision has resulted in the key interest rate reaching its highest level in over two decades, now standing at 5.5%.
It's important to note that the Federal Reserve has previously refrained from adjusting interest rates for the past month after a series of ten consecutive hikes. However, with this recent move, the new target federal funds rate now falls within the range of 5.25% to 5.5%. Comparatively, the previous range that was established back in May encompassed rates from 5% to 5.25%.
The primary objective of the Federal Reserve is to achieve a target inflation rate of 2%. The most recent Consumer Price Index Report for the month of June revealed that the inflation rate has currently risen to 3%.
This decision by the Federal Reserve signals its continued dedication to maintaining stability in the economy and ensuring that inflation remains under control. By providing greater insight into the history of interest rate adjustments and highlighting the current state of inflation, the Federal Reserve aims to foster a more informed understanding of its actions and their impact on the overall economy.