US Federal Reserve hikes by policy rate 25 bps

The Federal Open Market Committee said in the statement, "The Committee will closely monitor incoming information and assess the implications for monetary policy."

The Committee said its objective is to achieve maximum employment and a 2% inflation rate over the long term.

The Committee has determined to raise the target range for the federal funds rate to a range of 4-3/4 to 5%.

"The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.

"In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the statement added.

“In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective," it said.