Fed Raises Interest Rates by 75 Basis Points to Fight Inflation

The Federal Reserve said Wednesday that it would raise its benchmark interest rate 0.75 percentage points — the largest one-time increase since 1994 — in an attempt to curb persistent high inflation.

Wednesday’s rate hike marks an acceleration from May’s 0.50-point increase; inflation sped up in May after slowing down in April. Some experts have raised concerns that larger rate hikes could trigger a recession.

In a statement, the Fed’s Federal Open Market Committee — which made the interest rate decision — cited rising economic activity, “robust” job gains and low unemployment as positive economic factors. It described inflation as being driven by “supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures,” including Russia’s invasion of Ukraine and Chinese COVID-19 lockdowns. The Fed adjusts interest rates by altering the federal funds rate, the rate at which banks lend to each other overnight to meet asset reserve requirements.

Coverage was widespread and prominently featured across the spectrum on Wednesday afternoon. Headlines across the spectrum used words like “historic” and “record” to describe the rate hike. Some coverage from the right appeared to frame the Fed as losing control of inflation; the New York Post’s (Lean Right bias) coverage included words like “reckoning” and “frantically.”