Fed Raises Interest Rates Another 0.75 Point to Combat Inflation

The Federal Reserve on Wednesday raised its benchmark interest rate by another 0.75 percentage point, marking the fourth increase in five months.

The Fed’s policy rate is now set to a range of 2.25 to 2.5 percent, the highest since 2019. Fed Chairman Jerome Powell indicated that another increase could take place in September depending on the data. The benchmark rate has increased by 1.50% in the last two months, which is the largest spike recorded in the past 30 years. Central bank members voted unanimously in favor of the strategy, which is intended to slow demand and consumer spending. Powell echoed the recent sentiment from Treasury Secretary Janet Yellen that the U.S. economy is not in a recession, pointing to the strength of the labor market.

Outlets across the spectrum similarly labeled the interest rate increase as an "unprecedented action" by the Federal Reserve. Some left-rated outlets accentuated Powell's belief that "a little bit of pain is necessary" in order to reroute the economy, while others cited emergency measures enforced at the start of the COVID-19 pandemic as a notable contributor to "today’s overheated economy." Right-rated coverage noted how many economists "aren’t convinced" that the Fed's tightening of monetary policy will be enough to avoid a recession, suggesting that "aggressive" tactics to combat inflation could trigger a recession.