July 26, 2023—Citing ongoing concerns about elevated inflation, the U.S. Federal Reserve announced today it is raising its Federal Funds rate by a quarter of a basis point to 5.25 to 5.50 percent.
Fed Chair Jerome Powell said the economy is weathering the monetary-policy tightening well, and the Federal Reserve is committed to achieving its target of 2 percent inflation.
The current U.S. inflation rate is hovering right around 3 percent.
The key to whether the Fed’s Board of Governors would begin cutting rates, Powell said, would be when inflation comes down in a credible fashion, not when the rate hits 2 percent. He doesn’t see the inflation rate dipping down to its 2 percent target until 2025 or thereafter, Powell said during the press conference.
