Federal Reserve raises interest rate by quarter point

May 3 (UPI) -- The Federal Reserve announced a 10th interest rate hike on Wednesday, raising the rate to 5.25%.

While inflation has slowed, it is still higher than the 2% mark that the Fed hopes to achieve. Fed Chairman Jerome Powell also is facing pressure from politicians to stop raising rates, as fears of a recession increase.

Powell planned to hold a news conference to discuss the increase at 2:30 p.m. EDT.

On Tuesday, Democratic Sens. Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse and other lawmakers sent a letter to Powell saying that the Federal Reserve's aggressive actions were threatening to throw millions of people out of work.

"While the Fed should remain flexible to incoming data as it assesses the economy's progress toward achieving lower inflation, the evidence to date suggests that progress can continue to be made without slamming the brakes on the economy and costing millions of Americans their jobs," the letter said.

Inflation remains above the Federal Reserve's target. The most recent data show personal income levels increased by 0.3% from February to reach $67.9 billion, suggesting wage growth remains resilient against lingering inflationary strains.

The lawmakers argued in Tuesday's letter that Powell's aggressive actions would end up hurting working families more than inflation has.

"While we do not question the Fed's policy independence, we believe that continuing to raise interest rates would be an abandonment of the Fed's dual mandate to achieve both maximum employment and price stability and show little regard for the small businesses and working families that will get caught in the wreckage," the lawmakers wrote.

The failures of Silicon Valley Bank and Signature Bank in March -- combined with the "lagging impacts of the Fed's earlier rate hikes" -- have also left the U.S. economy "even more vulnerable to an overreaction by the Fed," the letter said.