Fed poised to hike rates by half a percentage point to fight inflation
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The announcement [came] at 2 p.m. Eastern time Wednesday at the conclusion of the central bank’s two-day policy meeting
The Federal Reserve is expected to raise interest rates again Wednesday, this time by half a percentage point, in an aggressive step toward combating the highest inflation in 40 years.
The rate increase would be the sharpest since 2000 and the second of seven hikes forecast for this year. Faced with soaring prices and a hot job market with record numbers of job openings, the Fed began raising rates in March, betting that a steady series of hikes will slash inflation, cool down the economy and get the coronavirus recovery on more sustainable footing.
The move would make an array of loans costlier for households and businesses, especially mortgage rates, which have already been inching up. Higher lending costs tend to cool down the economy, by weighing on business and consumer spending, and eventually lead to lower prices overall, especially for necessities such as housing, gas and groceries.
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