The Federal Reserve (Fed) raised interest rates by 75 basis points for the second time in a row at its July policy meeting and still believes that further increases are appropriate to curb inflation.
This brings the current interest rate of the United States to 2.50% from 1.75% previously.
The most significant change in the Fed's policy statement at this meeting is about the decline seen in spending and output.
However, job gains have strengthened in recent months and the unemployment rate remains weak.
The Fed added that inflation remains high, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices and broader price pressures.
Meanwhile, in a press conference that followed the central bank's decision, Chairman Jerome Powell said that a slower rate of increase may be necessary to give time to assess the impact of tightening measures on the economy and inflation.
But at the same time, he also supported the central bank's idea of delivering an 'extraordinarily large' rate hike in September, depending on current and future economic data.
Regarding the current economic situation, Powell said he does not see the US currently in a recession citing the low unemployment rate and strong wage and job growth.
"It doesn't make sense that the economy will be in recession", said Powell.
Overall, the US central bank is positive about current economic growth and interest rate hikes will continue but at a slower pace.
