U.S. Federal Reserve raises rates by 0.25%

As largely anticipated, the Federal Reserve has delivered another rate hike, but at 0.25% marking a further downshift in their monetary tightening regime. The Feds fund rate now sits at 4.75%. Jerome Powell’s speech, following the latest rate decision was digested favourably by investors as markets received further clarity on the direction of future rate decisions. Markets took comfort in data which suggests the environment is becoming disinflationary, and that higher rates are having the desired effect in cooling prices. However, Powell warned markets that there are still at least two more quarter point hikes to go without any cuts to interest rates in 2023, but still expects to see positive U.S. growth this year. The Fed will be paying attention to inflation within the services sector and the labour market which still remains tight.