Federal Reserve raises interest rates 0.25% to highest since 2007 amid bank crisis

The Federal Reserve raised the target range for its benchmark interest rate by 0.25% on Wednesday as it battles stubborn inflation and a banking crisis which has pushed the central bank into taking its most significant emergency actions since the onset of the pandemic.

The rate hike brings the Fed's policy rate, the federal funds rate, to a new range of 4.75%-5%, the highest since October 2007.

In its statement, the Fed said inflation remains elevated and that the central bank remains "highly attentive to inflation risks," while banking issues could cause credit conditions to tighten and weigh on economic growth.

"The U.S. banking system is sound and resilient," officials said in their policy statement.