• “We’re not trying to induce a recession,” the Fed chairman said while predicting more rate hikes and a slowing economy in the coming months.
• Unemployment is anticipated to rise to 3.7 percent by the end of 2022, eventually reaching 4.1 percent in 2024.
• Mr. Powell said he did not expect hikes of three-quarters of a percentage point to be “common”.

US interest rate hikes: US central bank has increased interest rates by three-quarters of a percentage point to rising inflation – the sharpest hike in 28 years.

The Federal Reserve indicated that more rate hikes were on the way, as well as a slowing economy and rising unemployment in the months ahead.

Read More: Jim Cramer: Fear market that steady rise in oil prices will lead to a recession

This will make it costlier for families, corporations, and governments to borrow – hurting credit card and mortgage payments.

The benchmark rate now sits at a range of 1.5 percent to 1.75 percent, values that have not been seen since before the pandemic began.

Fed Chairman Jerome Powell emphasized that the US economy was strong enough to withstand the rate hike, saying, “We’re not trying to induce a recession.”

He had previously ruled out such a large increase, but an unexpected spike in inflation last month – which many thoughts had peaked – forced the bank to reconsider.

Data published on Friday showed the US Consumer Price Index touched a 40-year high of 8.6 percent in May, one of the highest in the world.

In a statement, the Federal Open Market Committee cited the impact of the war in Ukraine and lockdown policies in China on soaring consumer prices.

Officials raised their forecasts for interest rates at the end of this year and next, expecting the median benchmark rate to climb to 3.4 percent by the end of 2022.

In March, that rate was predicted to be 1.9 percent.

It is predicted to rise to 3.8 percent by the end of 2023, up from 2.8 percent in March.

The modification indicates that Fed policymakers now expect inflation to linger longer than previously anticipated.

Mr. Powell said he did not expect hikes of three-quarters of a percentage point to be “common”.

Read More: Treasury Secretary Janet Yellen believes that inflation will “remain high”

The tightening of monetary policy was accompanied by a reduction to the Fed’s economic outlook, with the economy now seen falling to a 1.7 percent rate of growth this year. US interest rate hikes

Unemployment is anticipated to rise to 3.7 percent by the end of 2022, eventually reaching 4.1 percent in 2024.