Federal Reserve officials, struggling to contain the most rapid inflation in 40 years, delivered a third big rate increase on Wednesday and projected a more aggressive path ahead for monetary policy, one that would lift interest rates higher and keep them elevated longer.
The Fed raised its policy interest rate by three-quarters of a percentage point, boosting it to a range of 3% to 3.25%. That’s a significant jump from as recently as March, when the federal funds rate was set at near-zero, and the increases since then have made for the Fed’s fastest policy adjustment since the 1980s.
Even more notably, policymakers predicted on Wednesday that they would raise borrowing costs to 4.4% by the end of the year and forecast markedly higher interest rates in the years to come than they had previously expected. Fed chair Jerome Powell warned that those moves would be painful for the U.S. economy — but said curbing growth to contain price increases was essential.
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