The US Federal Reserve, America’s central bank, has raised interest rates by a quarter of a percentage point to 0.5%.

In a statement the Fed said that ongoing increases in the target range will be appropriate.

Market watchers took this to mean that interest rate increases of 25 basis points could be implemented at each of its six remaining policy meetings this year.

Such an outcome would raise the the target federal funds rate to between 1.75% and 2.00% by the end of 2022.

The Fed noted that indicators of economic activity and employment have continued to strengthen in the US, with strong job gains in recent months leading to a substantial decline in the unemployment rate has declined substantially.

In Association with

“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures,” the Fed stated.

“The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the US economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.”

The Fed also announced that it expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities shortly.

Fed member James Bullard was the sole dissenter on the decision – he wanted a 50 basis point increase immediately.