Speed Reads

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The Fed just aggressively raised interest rates again

The Federal Reserve said Wednesday it will again be raising interest rates three-quarters of a percentage point, as the central bank continues its aggressive push to tackle sky-high inflation. 

The 12-member Federal Open Market Committee unanimously approved the atypical hike, and also signaled in a post-meeting statement that "ongoing increases" are to be expected, The New York Times reportsWednesday's bump will lift the federal-funds rate — or, "the rate at which commercial banks borrow and lend their excess reserves to each other overnight," per Investopedia — to a range between 2.25 percent and 2.5 percent, adds The Wall Street Journal.

The statement from officials also acknowledged certain signs of economic slowdown since June's meeting, when the first 75 basis-point increase was approved: "Recent indicators of spending and production have softened," the statement read, per the Journal. But "[n]onetheless, job gains have been robust in recent months," and prices have meanwhile continued to quickly rise, "reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures."

The central bank has raised interest rates 4 times and a total of 225 basis points this year, "as it battles a 1980s-level breakout of inflation with 1980s-style monetary policy," Reuters writes. Investors are expecting at least a 0.5-percentage-point increase in September.

Though the bank hopes it can bring down prices without tipping the U.S. into a recession, an economic downturn is still possible.