US Fed expected to raise interest rate by quarter of a percentage point

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US Fed expected to raise interest rate by quarter of a percentage point

WASHINGTON - The Federal ReserveFederal Reserve is expected to raise its target interest rate by a quarter of a percentage point on Wednesday, setting aside the rapid hikes used last year to curb a surge in inflation in favor of a stepwise hunt for a stopping point.

The expected increase would set the US central bank's overnight interest rate in the 4.5 per cent to 4.75 per cent range, the highest since November 2007 when the economy was in the midst of what would prove to be a long and deep recession.

The economy continues to grow and create jobs, while inflation is slowing as a result of higher interest rates and tighter financial conditions, as policymakers hope to avoid that kind of outcome this time.

The Federal Open Market Committee is scheduled to release its policy statement at 2 pm EST 3 am, Singapore time Fed Chair Jerome Powell is scheduled to hold a news conference half an hour later to elaborate on the decision.

In recent events, the International Monetary Fund said that the coming year may be a little less challenging than previously thought, while the US data showed continued growth, moderate inflation, and a slower pace of Fed rate hikes. The International Monetary Fund said that it had proved surprisingly resilient in the face of monetary policy tightening and the ongoing war between Russia and Ukraine.