Prices for groceries, couches and rent are all climbing rapidly, and Federal Reserve officials have been warily eyeing that trend.
On Wednesday, they took their biggest step yet toward counteracting it, raising their policy interest rate by a quarter of a percentage point.
That small change carries a major signal: Policymakers have fully pivoted to inflation-fighting mode and will do what is necessary to make sure price gains do not remain hot for months and years to come.
The Fed is acting at a tense moment for many consumers and investors. Here’s what happened, and what it is likely to mean for markets and the economy.
other types of interest rates — on mortgages, car loans and credit cards. Some of the interest rates that consumers pay to borrow money have already moved higher in anticipation of the Fed’s coming adjustments.
Policymakers projected that six more similarly sized rate increases would happen this year.
That’s because inflation is hot.
perpetuate supply chain disruptions.
The Fed is also in charge of fostering maximum employment, but with hiring rapid and more open jobs than there are available workers, that goal appears to have been achieved, at least for now.