Fed raises rates by another three-quarters of a percentage point, pledges more hikes to fight inflation

The Federal Reserve on Wednesday raised benchmark interest rates by another three-quarters of a percentage point and indicated it will keep hiking well above the current level.

In its quest to bring down inflation running near its highest levels since the early 1980s, the central bank took its federal funds rate up to a range of 3%-3.25%, the highest it has been since early 2008, following the third consecutive 0.75 percentage point move.

Stocks had given up earlier gains after the announcement, with the Dow Jones Industrial Average dropping more than 200 points. But have since cut losses as Fed Chairman Jerome Powell discussed the outlook for interest rates. Traders have been concerned that the Fed is remaining more hawkish for longer than some had anticipated. Projections from the meeting indicated that the Fed expects to raise rates by at least 1.25 percentage points in its two remaining meetings this year.