The US Federal Reserve has announced a 0.75% interest rate hike, the largest increase in 28 years, as the central bank’s chairman stressed the need to avoid a recession and tame runaway price inflation.
The Fed’s Open Market Committee announced the decision on Wednesday, saying it would raise short-term rates by 75 basis points in a move aimed at reducing inflation to 2%. Prior projections suggested that figure could reach 3.4% by the end of the year.
“We’re not trying to induce a recession now, let’s be clear about that,” Fed Chairman Jerome Powell told reporters following the committee meeting, but noted that spikes in certain commodity prices could “take the decision out of our hands.”