The Federal Reserve kept its key short-term interest rate unchanged on Wednesday for the second time in a row, but left the door open for further rate hikes if inflation pressures accelerate in the coming months.
The Fed said in a statement after its latest meeting that it would keep its benchmark interest rate at around 5.4%, its highest level in 22 years. The Fed has backed off and has now raised interest rates only once since May.
It added, "Tightening financial and credit conditions for households and companies are likely to affect economic activity."
Long-term Treasury yields have risen since July, inflating the costs of auto loans, credit card borrowing and many forms of business loans. The average interest rate on a long-term fixed mortgage is close to 8%, its highest level in 23 years.
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