Fed raises interest rates by half a percent
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.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
![https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516-320-80.jpg)
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 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."
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Anahi Valenzuela has worked as an editorial assistant at The Week since 2022, where she assists with magazine content and covers the week's best photos. She started her career as a media producer at The Daily Californian and a writer for College Magazine.
-
Big Tech's answer for AI-driven job loss: universal basic income
In The Spotlight A new study reveals the strengths and limitations
By Joel Mathis, The Week US Published
-
'I will not be silent' on Gaza, says Kamala Harris
Speed Read In a meeting with Israeli Prime Minister Benjamin Netanyahu, Harris supported Israel's right to defend itself while expressing a desire to end Palestinian suffering
By Arion McNicoll, The Week UK Published
-
'How long can TikTok dominate as a social network?'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
Would Trump's tariff proposals lift the US economy or break it?
Talking Points Economists say fees would raise prices for American families
By Joel Mathis, The Week US Published
-
US inflation cools further in welcome sign for economy
Speed Read Prices fell in June for the first time in four years
By Rafi Schwartz, The Week US Published
-
The big deal: Why are fast-food chains suddenly offering discounts?
Today's Big Question After inflation and price hikes, a need to bring customers back
By Joel Mathis, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published