The US Federal Reserve has announced its decision to increase interest rates to a 16-year high, despite the banking crisis causing economic uncertainty. This marks the 10th hike since the Fed began its inflation-fighting campaign in 2022, with interest rates now standing at 5% to 5.25%. Fed Chair Jerome Powell has emphasized the importance of bringing down inflation, which rose to a 40-year high following the Covid-19 pandemic. The statement suggested that the Fed’s rate rises may be coming to an end, as it cut a phrase about additional increases which was in the last rate rise announcement. This decision is the fourth quarter-point hike, making it one of the smaller increases after the Fed raised rates by three-quarters of a point in a row during the summer and fall, where interest rates reached 40-year highs.

Source: The Guardian May 04, 2023 09:33 UTC