The Federal Reserve is raising interest rates by half a percentage point to reduce inflation, The Wall Street Journal reports.
The decision came after a two-day policy meeting wrapped up on Wednesday, and after a quarter-percentage-point increase in March. The central bank raised its benchmark federal funds rate to a range of 0.75 percent to 1 percent, to combat the highest inflation in 40 years.
The rate increase is the "sharpest since 2000 and the second of seven hikes forecast for this year," The Washington Post reports.
The Fed began raising interest rates from near zero this year, expecting that a series of hikes would combat inflation and boost the economy. However, some analysts worry increasing rates again too soon could be problematic. "Policymakers must move slowly with hikes and not too forcefully to raise interest rates too quickly, which could prompt businesses to lay people off or send the country into recession," the Post writes.
The rise will make it more expensive to take out a loan, affecting people looking to buy a home or carry a credit card balance.
"Inflation is much too high and we understand the hardship it is causing. We're moving expeditiously to bring it back down" said Federal Reserve Chair Jerome Powell during his press conference. "The economy and the country have been through a lot in the past two years and have proved resilient."