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The Federal Reserve raised its benchmark interest rates by another half a percentage point to bring down inflation, the smallest hike since the Fed embarked in June of this year on a series four 0.75 point hikes.
The increase approved Wednesday at the conclusion of the two-day meeting of the Federal Open Market Committee lifts the central bank’s federal-funds target to a range between 4.25 percent and 4.5 percent. The Fed is widely expected to continue to raise rates at subsequent meetings, although at a slower pace than last year.
Federal Reserve officials last year underestimated the persistence and strength of inflationary pressures in the economy, initially claiming prices were rising due to “transitory factors” such as temporary supply chain hiccups related to the post-pandemic reopening and unusually high levels of goods purchases.
