Feds Raise Interest Rates by 0.75%, More Rate Hikes Expected
The Federal Reserve raised interest rates for the third consecutive time on Wednesday by another 0.75 percentage points, and it is unlikely to be the last rate hike in the Fed's ongoing battle against inflation.
"Fed officials signaled the intention of continuing to hike until the funds level hits a 'terminal rate,' or end point, of 4.6% in 2023. That implies a quarter-point rate rise next year but no decreases," per CNBC. The Federal Reserve projects that with continuous effort, they will bring inflation down to 2% by 2025.
The central bank raised its target funds rate up to a range of 3%-3.25%, the highest it has been since early 2008, according to the news outlet. One Wells Fargo strategist told CNBC the Federal Reserve should have raised rates by 150 basis points in order to "rip off the Band-Aid."
U.S. inflation rates sit near record highs, despite slight dips in recent months. The latest CPI report puts inflation at 8.3%. "We have got to get inflation behind us," Federal Chairman Jerome Powell said. "I wish there were a painless way to do that. There isn't.