Posted on 09/21/22
| News Source: The Hill
The Federal Reserve on Wednesday boosted interest rates by three-fourths of a percentage point, the latest in a series of aggressive steps to tame stubborn inflation.
The Federal Open Market Committee (FOMC) — the panel of Fed officials responsible for monetary policy— hiked its baseline interest rate by 0.75 percentage points Wednesday to a span of 3 to 3.25 percent.
It is the fifth Fed rate hike since March and the third consecutive FOMC meeting ending with a 75 basis point hike.
The Fed had long been expected to issue another 75 basis point hike in September as inflation continued to rise through much of the summer and linger near four-decade highs. While monthly price growth has slowed slightly, the annual inflation rate of 8.2 percent in August, according to the consumer price index, was close to levels not seen since the late 1970s.
Fed officials had faced some pressure to hike by a full percentage point in the weeks leading up to the Wednesday meeting after consumer prices rose again in August. Financial markets locked in a roughly 20 percent change of a 1 percentage point rate hike in the hours before the FOMC meeting concluded Wednesday, according to the CME FedWatch tool, which tracks where traders expect the Fed to set interest rates.
Even so, the Fed stuck to its plan for a 0.75 percentage point hike, a move bank officials portrayed as an urgent but measured attempt to smother inflation.