Fed Raises Benchmark Interest Rate By A Quarter Point
The Federal Reserve raised its benchmark interest rate by a quarter point Wednesday, marking the first increase since 2018.
The move was widely expected by economists and investors, who had been anticipating a rate hike in light of rising inflation.
The decision by the Federal Open Market Committee (FOMC), the Fed's policy-setting body, was unanimous. The increase brings the target range for the federal funds rate to 0.25% to 0.5%. The federal funds rate is the interest rate that banks charge each other for overnight loans.
The Fed's decision comes as inflation has been rising at its fastest pace in decades. The consumer price index (CPI), a measure of inflation, rose by 7.5% over the past year, the largest increase since February 1982.
The Fed's goal is to keep inflation at a stable level of around 2%. The central bank believes that raising interest rates will help to cool inflation by making it more expensive for businesses and consumers to borrow money.
The Fed's decision was met with mixed reactions. Some economists praised the move, saying that it was a necessary step to fight inflation. Others warned that raising interest rates could slow economic growth.
The Fed's next meeting is scheduled for May 3-4. The central bank is expected to raise interest rates again at that meeting.
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