Fed hikes interest rates to 22-year high as inflation fight resumes

The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter of a point, resuming its campaign to increase borrowing costs and crush inflation after a brief pause in June.

The unanimous decision puts the key benchmark federal funds rate at a range of 5.25% to 5.5%, the highest since 2001, further restricting economic activity as the borrowing costs for homes, cars and other items march higher.

It marks the 11th rate increase aimed at combating high inflation since policymakers began tightening in March 2022. 

Policymakers also left the door open to additional interest rate increases this year, despite a recent pullback in inflation.