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.

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."
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.
-
How will Wall Street react to the Trump-Powell showdown?
Today's Big Question 'Market turmoil' seems likely
By Joel Mathis, The Week US
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
By Peter Weber, The Week US
-
Tesla Cybertrucks recalled over dislodging panels
Speed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off
By Justin Klawans, The Week US
-
How will the Fed manage Trump's economy?
Today's Big Question Jerome Powell is 'in a bind'
By Joel Mathis, The Week US
-
Crafting emporium Joann is going out of business
Speed Read The 82-year-old fabric and crafts store will be closing all 800 of its stores
By Peter Weber, The Week US
-
Why is the threat of stagflation rising?
Talking Points Inflation is sticky. Trump's tariffs won't help.
By Joel Mathis, The Week US
-
Trump's China tariffs start after Canada, Mexico pauses
Speed Read The president paused his tariffs on America's closest neighbors after speaking to their leaders, but his import tax on Chinese goods has taken effect
By Peter Weber, The Week US
-
Pros and cons of tariffs
Pros and Cons As Trump imposes tariffs on cars from overseas, here are the arguments for and against duties
By The Week UK