(FreedomBeacon.com)- At its latest meeting on Wednesday, the Federal Reserve announced yet another increase in the interest rate, though at a rate much slower than the last few hikes.
The Fed increases its target interest rate by a quarter percentage point Wednesday, which is a lot lower than the three-quarters percentage point increase it instituted at recent meetings.
While the hike is lower than expected, the Fed also promised they would make “ongoing increases” to the costs of borrowing as part of a larger plan it has to continue battling against inflation.
In a statement, the Fed said:
“Inflation has eased somewhat but remains elevated.”
In their statement, the Fed seemed to elude to the fact that its efforts to slow inflation have been working somewhat. Prices haven’t been increasing at nearly the rates they were even a few months ago, though they are still considerably higher on many goods than they were just a year ago.
That being said, there are factors that are still very concerning to the Fed. One of those factors is the ongoing war in Ukraine, which adds “elevated global uncertainty” to the mix, Fed officials said.
This time around, though, the Fed changed the language it used in regard to the war — and the ongoing COVID-19 pandemic — no longer saying they were directly contributing to the massive increase in prices.
As the Fed explained in their statement:
“The [Federal Open Market] Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.”
Many investors were anticipating this rate hike by the Fed, which increased the interest rate to a new range of between 4.50% to 4.75%. The Fed wasn’t so quick to say that they were ready to loosen the grip on increased interest rates just yet, even though inflation has decreased steadily for the last six months now.
That being said, the statement the central bank put out did say that any future increases in interest rates would likely be in increments of a quarter percentage, which would be much lower than the half or even three-fourths of a percentage it’s raised rates in recent months.
Even still, the Fed didn’t completely rule out large interest rate hikes in the future, as what the central bank will do depends on how the economic data plays out in the next few months — and beyond.
Officials with the Fed are hoping that they can continue to nudge overall inflation lower back toward the 2% target mark without triggering what could be a deep recession, or causing unemployment to rise precipitously from the current level of 3.5%
In December, inflation slowed down to an annual rate of 5%, according to the preferred measure the Fed uses.
At its policy meeting on Wednesday, the Fed didn’t issue any new projections for the economy.