The Federal Reserve continued aggressively pushing up interest rates Wednesday with a fourth-straight 0.75 percentage point increase, raising its benchmark rate to a range between 3.75% and 4%, the highest level since January 2008.
Facing the highest inflation in four decades Central Bank officials did what they announced at Wednesday’s meeting, however they also signaled a potential change on the monetary policy to prevent further economy slowdown.
The Fed said it “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
This week’s statement 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.”
A change in the policy might represent this was the last 0.75 point, or 75 basis point, increase. Economists are hoping for a new stand that could see a rate increase of half a point at the December meeting and then smaller hikes in 2023.
In remarks at a press conference, Fed Chairman Jerome Powell said there is “significant uncertainty” around the level of rates needed to bring down inflation, but “we still have some ways to go.”