The Federal Reserve raised interest rates Wednesday for the first time since 2018, kick-starting its efforts to tackle the country's highest inflation in four decades.
Fed Chair Jerome Powell is pictured during his renomination hearing with the Senate Banking Committee in Washington, D.C., on Jan. 11. The Fed raised interest rates on Wednesday for the first time since 2018. The Federal Reserve raised interest rates Wednesday for the first time since 2018, kick-starting its efforts to tackle the country's highest inflation in four decades.
"As I looked around the table at today's meeting, I saw a committee that's acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that," Fed chairman Jerome Powell told reporters after the central bank's rate-setting committee held its first in-person meeting since the beginning of the pandemic., reflecting the steepest rise in prices since 1982.
"The invasion of Ukraine by Russia is causing tremendous human and economic hardship," the rate-setting committee said in."The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity."
The Commerce Department reported Wednesday that consumer spending at gas stations jumped 5.3% last month, while retail sales elsewhere declined. Since then, the inflation outlook has worsened and policymakers telegraphed a more aggressive approach with two-thirds of the committee members projecting seven or more rate hikes this year."It's going to be quite some time before interest rates themselves become a headwind to the economy," McBride said."We're starting from near-zero levels and the Fed is likely to move in quarter-point baby steps."Mortgage rates have already increased.