UPDATE - US Fed raises interest rates by 50 basis points

By Ovunc Kutlu

ISTANBUL (AA) – The US Federal Reserve raised its benchmark interest rate by 25 basis points Wednesday as part of its fight against inflation.

The Federal Open Market Committee (FOMC) unanimously decided to raise the target range for the federal funds rate to between 4.5% and 4.75%.

In seven hikes, the US central bank raised the rate by a total of 425 points last year.

“Inflation has eased somewhat but remains elevated,” the FOMC said in a statement. “Russia’s war against Ukraine is causing tremendous human and economic hardship and is contributing to elevated global uncertainty.”

The aggressive monetary tightening is a result of record consumer and producer prices, which are still hovering around their highest level in 40 years.

Annual consumer inflation in the US came in at 6.5% in December, easing from 7.1% in November, while producer inflation dropped to 6.2% in December from November’s 7.3%.

Fed Chair Jerome Powell said the Job Openings and Labor Turnover Survey, or known as JOLTS, "has been quite volatile recently" noting that he has seen wages moving down.

He said he has seen high job creation in the labor market and the job market is still very strong.

Powell said he expects the FOMC to continue rate hikes. "Our judgment that we’re not yet at a sufficiently restrictive policy stance, which is why we say that we expect ongoing hikes," he said.

"In this situation where we still have the highest inflation in 40 years, the job is not fully done," he said. "It would be very premature to declare victory ... Our goal is to bring inflation down.”