US Fed announces biggest interest rate hike in nearly three decades

The US Federal Reserve has raised its benchmark interest rate by 75 basis points, marking its biggest rate hike in 28 years. 

The Federal Open Market Committee (FOMC) said in a statement on Wednesday that it decided to raise the target range for the federal funds rate to 1.5 percent -1.75 percent range.

The largest interest rate increase since 1994 was approved by all FOMC members, except for Kansas City Fed President Esther George who voted for a 50 basis point of rate hike.

The FOMC added that it anticipates "ongoing increases in the target range will be appropriate." 

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Returning inflation to 2 percent

"The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals," it said.

"The Committee’s assessments will take into account a wide range of information, including readings on public health, labour market conditions, inflation pressures and inflation expectations, and financial and international developments," it added.

The FOMC stressed that it is strongly committed to returning inflation to its 2 percent objective.

The US annual consumer inflation climbed to 8.6 percent in May, the highest level in more than 40 years. 

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