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 reports. Wednesday'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 Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
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.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
‘The worry is far from fanciful’Instant Opinion Opinion, comment and editorials of the day
-
How are Americans bracing for the end of SNAP?TODAY'S BIG QUESTION Millions depend on supplemental federal food funds that are set to expire this month, as the government shutdown begins to be acutely felt
-
Book review: ‘Joyride: A Memoir’Feature A journalist’s story of how she chased and accomplished her dreams
-
From candy to costumes, inflation is spooking consumers on Halloween this yearIn the Spotlight Both candy and costumes have jumped significantly in price
-
Warner Bros. explores sale amid Paramount bidsSpeed Read The media giant, home to HBO and DC Studios, has received interest from multiple buying parties
-
Gold tops $4K per ounce, signaling financial uneaseSpeed Read Investors are worried about President Donald Trump’s trade war
-
Why are beef prices rising? And how is politics involved?Today's Big Question Drought, tariffs and consumer demand all play a role
-
Electronic Arts to go private in record $55B dealspeed read The video game giant is behind ‘The Sims’ and ‘Madden NFL’
-
Fed cuts interest rates a quarter pointSpeed Read ‘The cut suggests a broader shift toward concern about cracks forming in the job market’
-
New York court tosses Trump's $500M fraud fineSpeed Read A divided appeals court threw out a hefty penalty against President Trump for fraudulently inflating his wealth
-
Trump said to seek government stake in IntelSpeed Read The president and Intel CEO Lip-Bu Tan reportedly discussed the proposal at a recent meeting
