The Federal Reserve raised the target range for its benchmark interest rate by 0.25% on Wednesday while left its options open on future rate hikes.

The central bank's move pushed its benchmark policy rate, the fed funds rate, to a new range of 5%-5.25%, the highest since September 2007. The Fed said future rate hikes would be contingent on the impact of previous rate hikes on the economy and financial developments.

Fed officials still view inflation as elevated, and note that they remain "highly attentive" to inflation risks.

As part of its most aggressive rate hiking campaign since the 1980s, the US central bank has increased the target range for its benchmark interest rate — the fed funds rate — by 5 percentage points since March 2022.

This content is not available due to your privacy preferences.Update your settings here to see it.In Wednesday's statement, the Fed said, "in determining the extent to which additional policy firming may be appropriate to return inflation to 2% over time, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic an financial developments."

This language replaces the Fed's framing back in March, which had said the central bank, "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."

Investors will closely listen to Fed Chair Jay Powell's press conference for additional clues on whether this is suggestive of a coming pause in the central bank's rate hikes.

On the heels of the latest bank failure, the FDIC's brokered sale of First Republic (FRC) to JPMorgan (JPM), officials reiterated the US banking system is sound and resilient.

The Fed noted that tighter credit conditions for households and businesses are likely to weigh on the economy, hiring and inflation, though the extent of the effects is uncertain.

The fed funds rate target range lines up with officials' interest rate projections released at the March policy meeting, which saw rates peaking in a range of 5%-5.25% and remaining at that level through the balance of the year.

The central bank is still battling inflation that has come down, but remains well above the Fed’s 2% target, while a series of bank failures has caused officials in recent weeks to reconsider raising rates as high as previously thought.

The decision was unanimous.

ARCHIVO - El presidente de la Reserva Federal, Jerome Powell, se retira del podio después de una conferencia de prensa en la sede de la Fed, el miércoles 22 de marzo de 2023, en Washington. (AP Foto/Alex Brandon, archivo)Click here for the latest economic news and economic indicators to help you in your investing decisions

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