Fed clears another 0.75-point rate hike in effort to cool economy

The Federal Reserve again raised interest rates three-quarters of a percentage point on Wednesday, marking its fourth consecutive hike of this size.

Overall, Wednesday's increase is the central bank's sixth interest rate increase this year, per The New York Times. The decision, which was unanimous, was also widely anticipated, considering the Fed's recent and aggressive campaign to bring down the decades-high levels of inflation.

As per The Washington Post, the question now becomes: "When and how officials will decide to ease, or even pause" such increases, "especially amid rising concerns that they may overcorrect or outrun their ability to see whether their policies are working." To that end, the Fed has predicted another possible half-point bump in December, "followed by a smaller hike in early 2023," the Post writes.

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Stocks rose after the Fed announced its decision, with traders seemingly bolstered by a reassuring addition to the bank's latest policy statement: "In determining the pace of future increases in the target range, the committee will 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." Per The Wall Street Journal, investors have interpreted that section as evidence the Fed is considering its increases holistically, is conscious of possible overtightening, and might perhaps back off soon.

In the wake of the news, White House Press Secretary Karine Jean-Pierre said the Biden administration respects the Fed's decision and its work to combat inflation. "This is part of our transition to more stable and steady growth," she said, per the Times.