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The Federal Reserve has announced a quarter-point increase in its target for the federal funds rate, bringing it to a range of 4.75% to 5%.

This is the highest it has been since September 2007.

The move was voted on unanimously by the Federal Open Market Committee (FOMC).

In a change to previous guidance, the committee no longer anticipates ongoing rate increases but instead suggests that some additional policy firming may be appropriate.

The statement acknowledges recent issues in the banking sector but claims that the US banking system remains sound and resilient.

However, it warns that recent developments are likely to result in tighter credit conditions for households and businesses, potentially weighing on economic activity, hiring, and inflation.

The dot plot shows that 10 members saw 5.1% as a median terminal rate, with seven above, and one as high as 5.9%.

The Fed also released its economic projections, which see growth at 0.4% this year, lower than in February, while unemployment is also down slightly to 4.5%.

Inflation is expected to rise to 3.3% by the end of the year, up two tenths, and 3.6% in 2024, up a tenth.

There is no change in the Kutty process, and the statement was unanimous.

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