The US Federal Reserve announced on Wednesday that the FOMC had agreed to raise the target range for the federal funds rate by 50 basis points to 0.75% to 1%, in line with expectations. 

Follow our live coverage of the Fed's policy announcements and the market reaction.

The Fed further noted that it will begin trimming the balance sheet on June 1, starting with a $47.5 billion cap on monthly runoff and rising to $95 billion monthly after three months.

Key takeaways as summarized by Reuters

"Fed anticipates ongoing increases in target range will be appropriate."

"Inflation expected to return to its 2% objective and the labor market to remain strong with appropriate monetary policy firming."

"Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, broader price pressures."

"Invasion of Ukraine by Russia is causing tremendous human and economic hardship."

"Implications for US economy highly uncertain but in the near term invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity."

"In addition, covid-related lockdowns in china are likely to exacerbate supply chain disruptions."

"We are highly attentive to inflation risks."

"Although economic activity edged down in Q1, household spending and business fixed investment remained strong."

"Job gains robust in recent months."

"Fed policy vote was unanimous."

Market reaction

The US Dollar Index turned south with the initial reaction to the Fed's policy announcements and was last seen losing 0.3% on the day at 103.12.

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