Fed hikes interest rates by a sharp 0.75 percent despite recession fears

The Federal Reserve imposed the latest in a series of sharp interest rate hikes on Wednesday in a sign that policymakers aren’t backing down from an aggressive campaign to lower decades-high inflation.

The rate-making Federal Open Market Committee hiked the benchmark interest rate by 0.75%, or 75 basis points, at the end of a two-day meeting. The latest increase moved the Fed’s target range to between 3% and 3.25%.

In a statement after the meeting, the FOMC said it “anticipates that ongoing increases in the target range will be appropriate” — an indication that the Fed isn’t done hiking interest rates.

“Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low,” the FOMC said. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”