US Fed hikes interest rates by 25 bps

The US Federal Reserve’s Open Market Committee decided, today, Wednesday, to raise the federal funds rate by 25 basis points, to a range between 4.75% and 5%, in line with market expectations.

The markets are focusing on how the Fed will assess the repercussions of the banking crisis and, accordingly, its upcoming policy to raise interest rates to protect the economy and continue to control inflation.

The Fed raised the interest rate 7 times in 2022, in meetings during the months of March, May, June, July, September, November and December.

The Fed raised interest rates by 25 points in February 2023, while 6 other meetings remain throughout the year, and the next meeting will be on May 3.

The Fed scaled back rate hikes from 50 points last December, and 75 points in November, indicating the success of the Fed’s aggressive campaign to slow inflation. Before the monetary tightening campaign, the interest rate in March 2022 was in the range of 0.25% to 0.50%.