WASHINGTON: The Federal Reserve raised its target interest rate by a quarter of a percentage point on Wednesday, yet continued to promise “ongoing increases” in borrowing costs as part of its still unresolved battle against inflation.

“Inflation has eased somewhat but remains elevated,” the US central bank said in a statement that marked an explicit acknowledgement of the progress made in lowering the pace of price increases from the 40-year highs hit last year.

Russia’s war in Ukraine, for example, was still seen as adding to “elevated global uncertainty,” the Fed said. But policymakers dropped the language of earlier statements citing the war as well as the COVID-19 pandemic as direct contributors to rising prices and omitted mention of the global health crisis for the first time since March 2020.

Still, the Fed said the US economy was enjoying “modest growth” and “robust” job gains, with policymakers still “highly attentive to inflation risks.”

“The (Federal Open Market) Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” the Fed said.

Stocks, modestly lower ahead of the Fed rate decision, were little moved by the release of the policy statement, with the benchmark S&P 500 index down about 0.3% on the session.

The yield on the 2-year Treasury note, the maturity most sensitive to Fed policy expectations, rose to the day’s high, last trading up 2 basis points at about 4.22%. The US dollar was little changed against a basket of major trading partner currencies.

“If you were hoping for clear signs of an upcoming pause in interest rate hikes, you were left wanting. The Federal Reserve retained the phrase ‘ongoing increases’ in their statement, leaving their options open depending on what upcoming economic data says,” said Greg McBride, chief financial analyst at Bankrate.

The decision lifted the benchmark overnight interest rate to a range between 4.50% and 4.75%, a move widely anticipated by investors and flagged by US central bankers ahead of this week’s two-day policy session.