The Federal Reserve announced a 0.25% interest rate hike following a meeting of the Federal Open Market Committee on Wednesday (March 22). The increase moves the rate to a range of 4.75% to 5%, which is the highest it has been since 2007.
The Federal Reserve was pessimistic about economic growth and said it expects the U.S. economy to grow by just 0.4% this year. In addition, the Fed believes the unemployment rate will rise from 3.6% to 4.5%.
For the first time since the Fed started hiking interest rates, the FOMC softened its language and suggested that continued rate hikes may not be necessary to get inflation under control.
"The Committee will closely monitor incoming information and assess the implications for monetary policy," the FOMC said in a statement. "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."
According to CNBC, previous statements said that "ongoing increases" would be necessary to bring down inflation.
Federal Reserve Chairman Jerome Powell did not rule out future rate hikes but said that current rates should result in credit tightening.
“If we need to raise rates higher, we will,” Powell said during a press conference. “I think for now, though ...we see the likelihood of credit tightening. We know that that can have an effect on the macroeconomy.”