Increase marks the fourth consecutive three-quarter point boost
The Federal Reserve increased interest rates another 0.75%, marking the fourth consecutive time it has done so as it attempts to rein in inflation. The target range is now 3.75%-4%, the highest level since January 2008.
Economists are reading the Fed statement released with the increase as an indication that a rate hike in December could be limited to 0.5%, with a few smaller hikes next year. The new language read, “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.”
“We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” Federal Reserve Chairman Jerome Powell said.
Prices remain near 40-year highs in this inflationary market, and a tight job market where there are two openings for every unemployed worker is pushing up wages, something the Fed is seeking to change as it tightens the money supply. Most economists still fear the Fed will pull the economy into a recession as it attempts to control inflation.
The cost of living has increased more than 6% in September, and 30-year mortgages have passed the 7% mark this week.