New York - The Federal Reserve has raised its benchmark overnight interest rate by a quarter of a percentage point, bringing it to the range of 5.25%-5.50%. This is now the highest U.S. central bank policy rate since 2007. The decision, the 11th rate increase in the last 12 meetings, was driven by concerns over persistent inflation.

The Fed remains watchful and open to further policy adjustments based on incoming data and the impact of rate hikes on the economy. Fed Chair Jerome Powell emphasized that future policy decisions will be made on a meeting-by-meeting basis, keeping the options open.

While inflation data since the last meeting has been weaker than expected, the Fed remains cautious in easing its hawkish stance until there is more progress in reducing price pressures. Powell warned against expecting near-term easing in rates and expressed hope for a 'soft landing,' where inflation falls and a recession is avoided.

The Fed's decision comes amidst robust job gains and moderate economic growth, but key inflation measures remain above the Fed's target. Powell believes achieving inflation targets without significant downturns is possible, but uncertainty remains.

As the economy and inflation dynamics evolve, the Fed will continue to assess the situation and make appropriate policy moves. With about eight weeks until the next Fed meeting, the pace of price increases could determine whether this rate hike concludes the current tightening cycle.