Fed Raises Interest Rates by 0.75 Percentage Points Again to Fight Inflation

The Federal Reserve raised interest rates by 75 basis points on Wednesday, matching experts’ expectations. 

This is the third consecutive 0.75-point rate hike this year, pushing the Fed’s benchmark federal funds rate — the interest rate at which banks borrow from each other to meet asset holding requirements — to its highest levels since 2008. A statement from the Fed’s Federal Open Market Committee (FOMC), which makes interest rate decisions, cited “modest growth in spending and production,” “robust” jobs gains, low unemployment and “elevated” inflation.

The move delivers on Fed Chairman Jerome Powell’s pledge to continue fighting inflation even if it brings “some pain to households and businesses” because, he said, “failure to restore price stability would mean far greater pain.” Inflation has slowed since the Fed began raising interest rates, as falling gas prices countered rising housing and food costs. However, GDP growth has also remained slow, meeting the common definition of a recession in the first two quarters of 2022. The FOMC said it would “be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.”

Coverage was immediately prominently featured across the spectrum, particularly in business-focused outlets. Some coverage in business outlets highlighted the impact on the stock market. Some headlines used descriptive language like “massive rate hike” and “Fed goes big again.”