WASHINGTON, D.C. - The Federal Reserve is raising its key interest rate by a quarter point in an effort to combat inflation.

According to a press release, the benchmark rate is rising to a range between 4.75% and 5%.

"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run," the release stated.

The release states that recent developments in the U.S. banking system are likely to result in tighter credit conditions for households and businesses to weigh in on economic activity, hiring and inflation.

The committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.

In determining the extent of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation and economic and financial developments.

Additionally, the committee will continue reducing its holdings of treasury securities and agency debt, as well as agency mortgage-backed securities as described in previously announced plans.

The committee is prepared to adjust the stance of monetary policy as appropriate should risks emerge that could impede the attainment of the committee's goals.