Fed slows tightening cycle again with 25bp rate rise

More rate hikes likely as Powell expresses concern over expectations “getting unanchored”

Jerome Powell
Jerome Powell
Federal Reserve

The US Federal Reserve raised its policy interest rate by 25 basis points on February 1, slowing the pace of its tightening for a second meeting in a row.

Members of the Federal Open Market Committee voted unanimously for the action. The target range for the federal funds rate is now 4.5–4.75%.

In its policy statement, the FOMC said it “anticipates that ongoing increases in the target range will be appropriate”.

Fed chair Jerome Powell hinted the Fed was likely to err on the side of caution

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