Fed raises key rate by a half-point in bid to tame inflation
WASHINGTON (AP) – The Federal Reserve intensified its fight against the worst inflation in 40 years by raising its benchmark interest rate by a half-percentage point – its most aggressive move since 2000 – and signaling further large rate hikes to come.
The increase in the Fed’s key short-term rate raised it to a range of 0.75% to 1%, the highest point since the pandemic struck two years ago.
The Fed also said it will start reducing its huge $9 trillion balance sheet, made up mainly of Treasury and mortgage bonds.
Reducing those holdings will have the effect of further raising borrowing costs throughout the economy.
(Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.)