The Federal Reserve announced on the 16th that it would raise the target range of the federal funds rate by 25 basis points to between 0.25% and 0.5%. This is the first time the Federal Reserve has raised interest rates since December 2018. After the end of the two day monetary policy meeting, the Federal Reserve issued a statement saying that in recent months, employment growth in the United States has been strong and the unemployment rate has dropped sharply, but inflation is still high, reflecting the imbalance between supply and demand, energy price rise and broader price pressure related to COVID-19. The impact of Russia's military action in Ukraine on the US economy is "highly uncertain", which may cause additional upward pressure on US inflation and pressure on economic activities in the short term. The statement said that the Fed expects that it will be "appropriate" to continuously raise the target range in the future. At the same time, the Fed is expected to start reducing its holdings of US Treasury bonds, institutional bonds and institutional mortgage-backed securities at the next monetary policy meeting, and start the process of reducing its balance sheet. The Federal Reserve also released the latest economic outlook forecast on the same day. It is expected that the US economy will grow by 2.8% in 2022, down 1.2 percentage points from the forecast in December last year; The US economy will grow by 2.2% in 2023, which is the same as previously predicted. Meanwhile, the US unemployment rate will remain at 3.5% this year and next, in line with previous forecasts. In terms of prices, the US inflation rate may rise to 4.3% this year, and the core inflation rate excluding food and energy prices is 4.1%, up 1.7 percentage points and 1.4 percentage points respectively compared with the previous forecast, and far higher than the 2% inflation target. At a press conference held after the meeting, US Federal Reserve interim chairman Powell said that the strong growth of the US economy and the continued strengthening of the labor market supported the Fed's decision to raise interest rates this time. Meanwhile, the impact of the situation in Russia and Ukraine on the US economy is "highly uncertain". In addition to the direct impact of the rise in global oil and commodity prices, the military action itself and related events may inhibit global economic activities, further disrupt the supply chain, and have spillover effects on the US economy through various channels such as trade. Financial market fluctuations may lead to credit tightening, which in turn affects the real economy. (Xinhua News Agency)