Fed takes decisive action, raises interest rates to 22-year high

In its latest move to combat inflation, the Federal Reserve made a unanimous decision on Wednesday to raise its benchmark interest rate by a quarter of a point, resuming its campaign to increase borrowing costs after a brief pause in June.

This move brings the key benchmark federal funds rate to a range of 5.25% to 5.5%, the highest level seen since 2001. The increase in borrowing costs for various essentials such as homes, cars, and other items is expected to further restrain economic activity.

This rate hike marks the 11th increase implemented since March 2022, demonstrating the Federal Reserve's continued dedication to combating high inflation.

Despite a recent pullback in inflation, policymakers have chosen to leave the door open to the possibility of additional interest rate hikes later this year, showing their commitment to maintaining control over inflationary pressures.