Federal Reserve Raises US Interest Rates by 75 Basis Points

WASHINGTON (Sputnik) - The Federal Reserve announced on Wednesday a 75-basis point, or a three-quarter percentage point, increase for the sixth US interest rate hike since the outbreak of the coronavirus pandemic two years ago.

"The Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent," the US central bank’s Federal Open Market Committee (FOMC) said in a statement.

The FOMC also said it believed that "ongoing interest rate increases will be necessary to achieve a sufficiently restrictive policy stance that will eventually return inflation to 2%."

The White House said it respects the independence of the Federal Reserve, adding that the latest rate hike should help bring housing inflation down.

"As mortgage rates increase, demand in the housing market, should continue to cool and inventory should increase, which should have the effect of lowering housing inflation," White House spokesperson Karine Jean-Pierre said during a press briefing. "This is part of our transition to stable and more stable and steady growth."

Inflation, as measured by the Consumer Price Index, stood at 8.2% for the year to September, not too far from the 40-year peak of 9.1% during the 12 months to June.

While it was prepared to keep to a tough rate regime to beat inflation, the FOMC said it was "prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals."