Federal Reserve announces small interest rate hike as inflation appears to slow

The Federal Reserve announced Wednesday it was raising interest rates by 0.25 percent, the latest in a series of ongoing rate hikes aimed at slowing inflation.

"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 two percent over time," the Federal Reserve said in a statement.

The rate increase didn't come as much of a surprise to financial insiders, as CME Group data showed the market had predicted a 98 percent chance of the quarter interest bump. CNBC noted that where there is often a strong consensus in financial circles heading into Federal Reserve meetings, "it's rarely this high."

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Given the rising inflation seen over the last year, the Federal Reserve has been on a consistent push to increase interest rates since last March. However, Bloomberg noted that, as there begin to be signs of flatlining inflation, the small 0.25 hike is an indicator that the Federal Reserve is ready to "slow its inflation-fighting campaign without signaling a readiness to stop.

Bloomberg's financial index noted monetary problems in the U.S. have slowed to their tiniest impact in a year, as indicated by declining mortgage rates that have fallen from 7.08 percent back to 6.13 percent. Additional factors such as rising commodity prices and a weakening U.S. dollar have contributed to optimism about the economy.

However, despite the potential decline of inflation, experts said the Federal Reserve needed to maintain caution when tapering off rate hikes.

"Passing peak inflation is welcome and policymakers appear to have increased confidence that inflation is on a downward path," analysts at Bank of America wrote, per NBC News. "But the Fed is not yet convinced that inflationary pressures will dissipate quickly."