Fed keeps interest rate unchanged, signaling hike soon

The US Federal Reserve announced Wednesday it kept its benchmark overnight interest rate unchanged between 0.00% and 0.25% and signaled a rate hike in March.

"With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate," Fed said in a statement after its two-day meeting.

This will be the first increase since 2018 as the bank focuses on combatting inflation and curb economic impact of the COVID-19 pandemic.

The bank also noted that it will end tapering, the process of reducing monthly asset purchases, in early March.

In its previous meeting in December 2021, the Fed removed the word "transitory" from describing inflation, and indicated it would end tapering earlier and faster than previously planned.

US consumer prices rose 7% year-on-year in December 2021, marking the largest 12-month increase since June 1982.