WASHINGTON: The US Federal Reserve raised its benchmark lending rate on Wednesday, as it sought to strike a balance between curbing high inflation and averting further upheaval in the commercial banking sector.

The quarter-point increase, which was in line with expectations, lifts the target range to 4.75-5.00 percent at the end of a two-day policy meeting.

In a statement, the Fed said recent banking sector developments “are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation.”