Fed Raises Interest Rates to Fight Inflation One Week Before Midterms

The Federal Reserve once again raised interest rates by three-quarters of a percentage point — an effort to fight persistent inflation by indirectly raising borrowing costs to slow down the economy. The increase brings the target federal funds rate to its highest level since 2008.

Key Quotes: Some have raised concerns that the Fed’s interest rate hikes could slow the economy too quickly and spark a recession. Addressing these concerns, central bankers wrote that future rate hikes would “take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.” However, Fed Chairman Jerome Powell told reporters that “we still have some ways to go” before ending rate hikes.

For Context: Recent polling suggests voters see inflation and the economy as top issues in the 2022 midterm elections. However, interest rate adjustments are the administration’s primary means of controlling inflation, and Fed officials are not elected. Recently-released data showed an unexpected rise in job openings, and the Fed once again cited “robust” job gains in its rate hike report.

How the Media Covered It: Coverage was widespread across the news media, particularly in business-focused outlets. Initially, there were no clear differences between coverage from the left and right. Some headlines sensationally described the rate hike as “supersized,” “jumbo,” and “monstrous.”