US Federal Reserve raises interest rates by 25 basis points

By Ovunc Kutlu

ANKARA (AA) - The US Federal Reserve raised interest rates by 25 basis points to between the range of 0.25% - 0.50% on Wednesday.

It marks the first hike by the central bank since December 2018.

"Indicators of economic activity and employment have continued to strengthen. Job gains have been strong in recent months, and the unemployment rate has declined substantially," the Federal Open Market Committee (FOMC) said in a statement.

"Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures," it added.

The hike was approved by all members of the FOMC, except St. Louis Fed President James Bullard who wanted an increase of 50 basis points/

The central bank said implications of the Ukraine-Russia war for the US economy are "highly uncertain" but in the near-term related events are likely to create additional upward pressure on inflation and weigh on economic activity.

The Fed said it expects to begin reducing its holdings of Treasury securities, agency debt and agency mortgage-backed securities at a upcoming meeting.