The U.S. Federal Reserve raised its key interest rate by a quarter percentage point to the highest level in 22 years on Wednesday.

The Fed unveiled the latest decision after a meeting of the Federal Open Market Committee(FOMC), bringing the target range to five-point-25 to five-point-five percent, the highest to be posted since 2001.

In a statement, the Fed said “recent indicators suggest that economic activity has been expanding at a moderate pace,” adding that growth in new jobs has been robust in recent months, the unemployment rate has remained low and inflation remains high.

The statement then stressed that the FOMC remains highly alert to inflation as it said “tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.”

The central bank reiterated that it aims “to achieve maximum employment and inflation at the rate of two percent over the longer run.”

The hike has now widened the gap with South Korea’s key interest by up to two percentage points, with the Bank of Korea holding its key rate steady at three-point-five percent for the fourth consecutive time two weeks ago.