The Federal Reserve, the central bank of the United States, announced a decision to raise its benchmark interest rate, shifting away from a pause implemented earlier this year. The rate now stands within a range of 4.0 to 4.25 percent, as confirmed in a statement released Wednesday.
The move reflects observations of a softening in U.S. economic growth during the first half of the year. Recent indicators suggest a deceleration in job creation, accompanied by a slight increase in the unemployment rate, though it remains at a relatively low level. The statement also acknowledged a rise in inflation, which continues to register above desired levels.
The Federal Reserve reiterated its commitment to adjusting monetary policy as needed to achieve its objectives. The statement emphasized a data-dependent approach, indicating that the central bank will closely monitor a wide range of information, including labor market conditions, inflationary pressures and inflation expectations, when making future decisions.
Historically, higher interest rates have been utilized to curb inflation. However, these measures can also negatively impact stock markets and dampen investment activity. Conversely, overly low rates carry the risk of exacerbating inflationary pressures, a concern consistently voiced by the central bank.