Fed raises interest rates 0.75% for second straight month

The Federal Reserve raised interest rates 0.75% as expected.

The move comes as the central bank continues to try to rein in inflation that is at its highest point in 40 years. This puts the federal funds rate in a target range of 2.25% and 2.5%. By making it more expensive to borrow money, the Federal Reserve is hoping to slow economic activity that has contributed to rising prices, which increased 9.1% in June.

The Fed has said its target inflation rate is 2% and will take whatever steps necessary to get there. This is the fourth consecutive meeting it has increased borrowing costs, and the second consecutive month for a 0.75% boost in the interest rate.

The bank did note that recent indicators of spending and production have slowed, but that it anticipates ongoing increases. Most economists expect interest rate increases well into the second half of the year, but the amount is unknown. Some predict another 0.75% increase in September, but if economic data indicates a slowing in the economy, then a smaller 0.5% rise might be an option.