The US Federal Reserve held interest rates at a 22-year high for a second straight meeting, while suggesting that the recent rise in Treasury yields may weigh on the economy and inflation.
“Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation,” the US central bank’s policy-setting Federal Open Market Committee said in a post-meeting statement published on Wednesday in Washington, adding the word “financial” to language that previously referred only to credit conditions.
The decision left the target range for the benchmark federal funds rate unchanged at 5.25% to 5.5%, the highest since 2001, as part of a strategy to slow the pace of rate increases as the central bank nears the end of its tightening campaign. The S& index and Treasuries extended their rally while the dollar slipped after the announcement.
