The Federal Reserve on Wednesday raised benchmark interest rates by three-quarters of a percentage point and said it will keep hiking well above the current level.
In its quest to bring down inflation running at levels not seen in 40 years the central bank took its federal funds rate up to a range of 3%-3.25%, the highest it has been since early 2008. This was the third consecutive 0.75 percentage point increase.
“We have got to get inflation behind us,” Fed Chair Jerome Powell said in a news conference. “I wish there were a painless way to do that. There isn’t.”
In an almost identical stand after prior Fed meetings, Powell said U.S. central bank officials are “strongly resolved” to bring down inflation and “will keep at it until the job is done.”
Projections from the meeting indicated that the Fed expects to raise rates by at least 1.25 percentage points in its two remaining meetings this year.
According to the Fed, GDP growth will be slowing to 0.2% for 2022, rising slightly in the following years to a longer-term rate of just 1.8%.
The revised forecast is a sharp cut from the 1.7% estimate in June and comes following two consecutive quarters of negative growth.
Central bank officials expect for the unemployment rate to rise to 4.4% by next year from its current 3.7%.