The expected increase would set the U.S. central bank’s benchmark overnight interest rate in the 4.50%-4.75% range, the highest since November 2007
The Federal Reserve is expected to raise its target interest rate by a quarter of a percentage point on Wednesday, setting aside the rapid hikes used last year to curb a surge in inflation in favour of a more stepwise hunt for a stopping point.
The rate-setting Federal Open Market Committee is due to release its policy statement at 2 p.m. EST . Fed Chair Jerome Powell is scheduled to hold a news conference half an hour later to elaborate on the decision. Caught flat-footed last year as inflation accelerated and threatened to prove far more persistent than anticipated, the Fed approved the fastest interest rate hikes since the 1980s. Starting with a quarter-percentage-point increase in March, the central bank by the summer was raising rates in increments of three quarters of a percentage point, and all told moved the target policy rate up by 4.25 percentage points in just 10 months. It delivered a half-percentage-point hike at its Dec.
Policy-makers are adamant they will not make what they consider to be the crucial error of pausing further rate hikes until they are convinced inflation is on a durable path back to the 2 per cent goal.
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