WASHINGTON, May 3: The Federal Reserve on Tuesday lifted the headline US interest rate by a quarter of a percentage point to 3.0 per cent, tightening borrowing costs for the eighth successive meeting. The US central bank’s policymaking committee said that even after the hike, its monetary policy remains “accommodative,” with future rate movements to be “measured.”
“The Federal Open Market Committee decided on Tuesday to raise its target for the federal funds rate by 25 basis points to 3.0 per cent,” the Fed’s policymaking committee said in a statement.
Under the chairmanship of Alan Greenspan, the FOMC acknowledged signs of an economic deceleration, while noting that inflation is a growing danger in the world’s biggest economy.
“Recent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices,” it said.
“Labour market conditions, however, apparently continue to improve gradually. Pressures on inflation have picked up in recent months and pricing power is more evident.”
But the FOMC said that “even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity.” —AFP
