The Federal Reserve announces that it will be aiming for higher interest rates by 75-basis points in the midst of the soaring inflation.
The country's central banking system confirmed the move on Wednesday, which sets a new benchmark interest rate peak in over three decades since 1994.
This comes as an attempt to tame the rising inflation in the nation, a move that could potentially drag the country's economy prosperity and apply even more pressure on the financial present and future of working Americans.
According to the Federal Reserve, this action is taking place with the objective of bringing the inflation back down to its 2 percent cap.
“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices and broader price pressures,” the central bank’s Federal Open Market Committee said in a statement. “The committee is strongly committed to returning inflation to its 2 percent objective.”
This move reportedly places the benchmark interest rates somewhere between the 1.50% to 1.75% range, higher than the percentage that was seen since the start of the pandemic just over two years ago.
Also, officials also put forward a plan of rising rates for the rest of 2022. According to officials, the new economic predictions for the remaining of the year believe that interest rates are expected to reach 3.4% by December, which surpasses
Officials also laid out an aggressive path of rate increases for the remainder of the year. New economic projections released after the two-day meeting showed policymakers expect interest rates to hit 3.4% by the end of 2022, which would be the highest level since the recession era.
However, Federal Reserve Board Chair Jerome Powell says that these higher rates will not conclude in a recession-like scenario for the country, stating that the country's economy is in good enough shape to resist living through these rising interest rates.
"It does appear that the U.S. economy is in a strong position and well positioned to deal with higher interest rates," Powell said.
