The Federal Reserve approved an interest rate hike that will result in borrowing costs being at a 22-year high.
The move is an effort to reduce inflation.
This is the 11th time the Federal Reserve has raised interest rates to combat inflation.
Upon interest rate hike approval, Fed Chairman Jerome Powell said at a press conference, “We’ve covered a lot of ground, and the full effects of our tightening have yet to be felt.”
“The Fed’s monetary policy actions are guided by our mandate to promote maximum employment and stable for the American people,” Powell stated.
“My colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher cost of essentials, like food, housing, and transportation,” he said, adding, “We are highly attentive to the risk that high inflation poses to both sides of our mandate and we are strongly committed to returning inflation to our two percent objective.”
Reporting from CNBC:
In a move that financial markets had completely priced in, the central bank’s Federal Open Market Committee raised its funds rate by a quarter percentage point to a target range of 5.25%-5.5%. The midpoint of that target range would be the highest level for the benchmark rate since early 2001.
