The Federal Reserve Bank has carried out the first of the steps it said it would have to take to slow the national economy and address the issues raised by inflation.
“Indicators of economic activity and employment have continued to strengthen,” said the Fed’s Open Market Committee in a statement this Wednesday afternoon. “Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.”
The nation’s central bank noted that the invasion of Ukraine by Russia was causing tremendous human and economic hardship. “The implications for the U.S. 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 decided to raise the target range for interest from a quarter of one percent to a half of one percent, with several additional increases of a similar magnitude anticipated later this year. It’ll also start slowly reducing the nation’s money supply.
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