Your #1 source for auto industry news and content

The Fed approves another 0.75-point interest rate hike to combat stubbornly high inflation

The Federal Reserve approved a fourth consecutive three-quarter point hike in interest rates this week and hinted at a likely shift in its monetary policy to lower inflation.

The central bank increased its short-term borrowing rate by 0.75 percentage points to a target range of 3.75%-4%, the highest level since January 2008, in a move that the markets had been anticipating for a while.

The Fed also made a significant adjustment to its policy statement, which Wall Street traders are taking as a sign that the central bank could soon scale back its interest rate hikes.

Although Chairman Jerome Powell indicated he expects a conversation about reducing the interest rate at the next meeting or two, he rejected the notion that the Fed may be pausing soon. He emphasized that bringing inflation down will likely need tenacity and patience.

The Chairman’s future outlook seemed uncertain as well. The “terminal rate,” or the point at which the Fed stops hiking interest rates, would likely be higher than anticipated at the September meeting, he said.

There are growing worries that the Fed’s initiatives to lower living expenses may also push the economy into a recession. Even though the full effects of the interest rate hikes have yet to materialize, Powell stated that he still sees a path to a “soft landing” in which there is no sharp contraction. However, the US economy has shown little to no growth this year.

The Biden administration and the majority of Congress members have avoided interfering with the Fed’s efforts to control prices, despite polls suggesting that voters’ main concern is inflation.

However, a few Democrats have started criticizing the central bank’s strategy, stating that aggressive interest rate increases could result in millions of people losing their jobs.

Did you enjoy this article? Please share your thoughts, comments, or questions regarding this topic by connecting with us at

Be sure to follow us on Facebook, LinkedIn, and TikTok to stay up to date.

While you’re here, don’t forget to subscribe to our email newsletter for all the latest auto industry news from CBT News.

Related Articles

Manufacturers In This Article

More Manufacturer News

Latest Articles

From our Publishing Partners