The U.S. Federal Reserve raised interest rates by 0.75% today for the third consecutive time as the central bank continues to fight the highest inflation rates seen in decades. The interest rate hike brings the central bank's federal funds rate to a new range of 3.0%-3.25%, its highest level since 2008.
The Fed policy reported a stronger economy with modest growth in spending and production. Officials also see inflation rising 5.4% this year and do not foresee inflation returning to 2% until 2025.
The longer the period of high inflation continues, the greater the chances that expectations of higher inflation will become entrenched, making it difficult for the Fed to achieve price stability.