Fed makes history with second massive rate hike in as many months

What seemed unfathomable just six months ago – a 75-basis-point rate hike by the Federal Reserve – has now happened twice in a row.

At the conclusion of its July monetary policymaking meeting, members of the US central bank on Wednesday once again approved a supersized interest rate hike of three-quarters of a percentage point. Members voted unanimously in favor of the aggressive move to tackle white-hot inflation.

The unprecedented action emphasizes how far the Fed is willing to push the economy to temper rising costs for Americans amid the highest price increases since the 1980s.

“Recent indicators of spending and production have softened,” Fed officials said in an official statement. “Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low.” Inflation is still elevated, they said, “reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”