The Federal Reserve announced that it has raised its key policy interest rate by half a percentage point for the first time since 2000.
While speaking at a press conference today, Federal Reserve Chair Jerome Powell said that “Inflation is much too high, and we understand the hardship it is causing. We are moving expeditiously to bring it back down”. Though the economy proved to be resilient in the past two years it is imperative to bring down the inflation to have a “sustained period of strong labor market conditions that benefit all,” he said.
The hike in the Fed interest rates will see an increase in the borrowing cost for everyone and that includes higher interest rates on credit cards, car loans, and even mortgages.
Consumer prices have soared at the fastest pace in 40 years. Families are seeing prices going up for everything starting from gasoline to food and even housing.
According to Powell, “Inflation remains well above our longer-run goal of 2%.”