The Federal Reserve maintains a key interest rate above 5%

Maintaining its fight against persistent inflation in the economy, the Federal Reserve kept its benchmark federal funds interest rate at approximately 5.5% in March.

While price growth has cooled since peaking in 2022, it has remained elevated. These are the points made by the Federal Open Market Committee, the central bank, in its most recent statement.

The committee declared that it will therefore maintain the current interest rate until it is more certain that inflation is consistently heading in the direction of its stated 2% target.

After being implemented in July, the current rate has caused the cost of borrowing to increase.

A long-standing monetary practice with a straightforward objective is what the Fed is doing. In this case, 2% inflation will be the desired level of inflation that will be reached by raising the cost of borrowing money through credit cards, loans, and other financial instruments. This will reduce spending by individuals and businesses.