In an effort to tackle the nation’s persistently high inflation, the US Federal Reserve raised interest rates on Wednesday, the fourth consecutive increase of 0.75%.
The central bank reiterated its commitment to getting inflation back to its 2% target in a statement that stated, ‘Inflation continues elevated, reflecting supply and demand imbalances associated to the epidemic, increased food and energy prices, and broader pricing pressures.’ This comes after the two-day meeting of the Federal Open Market Committee (FOMC).
The Federal Reserve has been raising interest rates since March in an effort to slow the economy and lower the nation’s skyrocketing inflation.
Interest rates have an impact on the cost of borrowing money and making investments in the economy. This rate hike marks the central bank’s sixth consecutive increase just this year.
The policy decision set the target federal funds rate in a range between 3.75%-4% which is the highest since 2008.
The Fed’s policy tightening has sparked a debate about its impact on the US and world economies, additionally, many fear that any further hikes could stress the financial system or even trigger a recession.
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