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The Federal Reserve said Wednesday it was raising its short-term borrowing rate another 0.75% to slow key areas of the economy and tame inflation, which is at a 40-year high.
The central bank said its new target range is 3.75%-4%, the highest level since January 2008.
The aggressive move is the latest in a string of borrowing cost increases imposed by the Fed in recent months as it tries to slash price increases by cooling the economy and choking off demand. The approach, however, risks tipping the U.S. into a recession and putting millions out of work.
The fourth rate hike of 2022 also arrives less than a week before the midterm elections.
“Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks,” Fed officials said in a statement. “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Data on consumer prices released last month showed that costs rose 0.4% on a seasonally adjusted basis in September, defying efforts to bring prices down.
