The Federal Reserve raises its benchmark interest rate by 0.75% to a target range of between 1.5% and 1.75% amid surging inflation. It is the largest interest rate increase in the United States since 1994.
The 2021–2022 inflation surge is the elevated economic inflation throughout much of the world that began in early 2021. It has been attributed primarily to supply shortages caused by the COVID-19 pandemic, coupled with strong consumer demand driven by historically robust job and wage growth as the pandemic receded. The Federal Reserve System is the central banking system of USA. After a series of financial panics (particularly the panic of 1907), it led to the desire for central control of the monetary system in order to alleviate financial crises.
The Federal Reserve said to increase its key interest rate by three quarters of a percentage point to a range of 1.5% to 1.75%. This is the biggest interest rate rise of The US central bank nearly 30 years as it ramps up its fight to rein in soaring consumer prices. The rise comes after inflation in the US surged unexpectedly in the last month. The head of the Federal Reserve is under pressure now as price rises accelerate. As central banks around the world are taking similar steps, it will mark a massive change to the global economy, where businesses and households enjoyed years of low borrowing costs.