FOMC raises rates by 25 basis points

The Federal Open Market Committee today announced it would raise the target range for the federal funds rate by 25 basis points to 5.25% to 5.5%. The increase follows the committee’s decision in June to leave the rate unchanged following a series of rate hikes that began last year.

The FOMC’s decision will bring the rate to its highest level since 2001. In a news conference, Federal Reserve Chairman Jerome Powell said that the committee believes monetary policy is restrictive and putting downward pressure on economic activity and inflation. However, when pressed by reporters on the possibility of further rate pauses, he didn’t commit to any single course of action.

“We’re going to be going meeting by meeting,” Powell said. “We haven’t made any decisions about any future meetings, including the pace at which we consider hiking, but we’re going to be assessing the need for further tightening.”