The Federal Reserve’s Open Market Committee recently raised the target for the federal funds rate by 25 basis points to 5%, marking the 16th straight increase since June 2004. The federal funds target rate is the interest rate charged by banks when they borrow funds “overnight” from each other.

“Economic growth has been quite strong so far this year. The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices,” the Fed said in a prepared statement. “Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.”

The Fed also indicated future interest rate increases, stating “some further policy firming may yet be needed to address inflation risks but emphasizes that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information.”