The central bank embarked on an aggressive campaign of rate hikes in March last year to take aim at price increases. But more than a year later, inflation remains stubbornly above its long-term target of two per cent.
The policy-setting Federal Open Market Committee's latest decision was in line with expectations, leading analysts and traders to scrutinise the statement for any shift in the Fed's guidance on future decisions. "Support for the 25 basis-point rate increase was very strong across the board," Fed Chair Jerome Powell told a press conference after the decision was announced.
But regional banks came under renewed pressure Tuesday, with some share prices declining by as much as 25 per cent on concerns about the impact of interest-rate hikes on their financial health. Further declines were recorded on Wednesday. The broader US economic data remains mixed but is showing some signs of softening, with growth slowing to an annualised rate of 1.1 per cent in the first quarter.
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