US Federal Reserve raises interest rates to their highest level in over 22 years.

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The Federal Reserve of the United States hiked interest rates on Wednesday, raising benchmark-borrowing prices to their highest level in more than two decades.

The Federal Open Market Committee raised its funds rate to a target range of 5.25-5.5 percent, as financial markets predicted. The midpoint of this target range is the benchmark rate’s highest level since early 2001, according to international media late Wednesday.

Since Monday, US markets have been seeking for signs that this could be the last boost before the Federal Reserve takes a break to examine how previous hikes are harming the economy.

While it was projected in June that two rate hikes were imminent this year, markets had bet heavily on no further hikes this year.

During a news conference on Wednesday, Chairman Jerome Powell stated that while inflation has moderated significantly since mid-2022, meeting the Fed’s interest rate target of 2% remains a long-term goal.

Meanwhile, he signaled that the rate would remain steady at the Federal Open Market Committee’s (FOMC) next meeting in September.

In addition, the rise is the 11th time the FOMC has raised interest rates since March 2022. More limits on US monetary policy will not come as a surprise, as most market observers believe US inflation is now too high.

Overall, officials and experts are unlikely to shift their hawkish stance on the September FOMC meeting until more progress has been made in easing the country’s pricing pressures.