Fed Raises Interest Rates to Highest Level Since 2001
Summary from the AllSides News Team
The Federal Reserve raised interest rates by another quarter point, reaching the highest level since 2001.
The Details: The latest move raises the target range for the federal funds rate to 5.25-5.5%, narrowly above 2007’s 5.26% peak.
For Context: The decision resumes the Fed’s fight against inflation after it paused rate hikes in June. However, the Fed noted then that it intended to raise rates again before the end of 2023. Interest rate hikes are intended to slow inflation by raising borrowing costs and slowing down economic activity. While there has been some economic cooling, the absence of a major slowdown has led some economists to project a more optimistic outlook.
Progress on Inflation? Year-over-year inflation fell to 3% in June — the lowest rate since 2021. However, Fed Chairman Jerome Powell said there was still “a long way to go” before inflation reached the Fed’s standard 2% target.
How the Media Covered It: Coverage was common and largely nonpartisan across the spectrum, with many headlines framed to discuss what this “means for you.”
Featured Coverage of this Story
From the Center
Fed raises interest rates, leaves door open to another increase
The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, citing still elevated inflation as a rationale for what is now the highest U.S. central bank policy rate in 16 years.
The rate hike, the Fed's 11th in its last 12 meetings, set the benchmark overnight interest rate in the 5.25%-5.50% range, and the accompanying policy statement left the door open to another increase.
"The (Federal Open Market) Committee will continue to assess additional information and its implications for monetary policy," the Fed said in...
From the Right
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...
From the Left
Interest rates just went up again: What the latest Fed move means for you
Eleven times in 17 months. That’s how fast the Federal Reserve has hiked its overnight bank lending rate, which directly or indirectly affects many consumer rates.
The Fed’s aggressive campaign is intended to beat down inflation. And it may be working. Based on the latest reading, inflation as measured by the Consumer Price Index grew at just 3% in June. And the Fed’s preferred inflation measure — the core Personal Consumption Expenditures Index — inched down to 4.6% in its latest reading.
In either case, both numbers are still above the Fed’s 2% target, which suggests the...
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