Currents News Staff

With prices surging and Americans struggling to keep up, the Federal Reserve took a bold step to tame what seems like relentless inflation by raising interest rates by three-quarters of a percentage point.

It’s the biggest hike in nearly three decades.

“We at the Fed understand the hardship that high inflation is causing,” said the U.S. Federal Reserve Chairman Jerome Powell. “We’re strongly committed to bringing inflation back down. And we’re moving expeditiously to do so.”

In fact,  Powell suggested that the government won’t likely make a habit of being this aggressive with interest-rate hikes in the future. But he didn’t rule out another significant increase in the coming months.

When it raised interest rates by 0.5% last month, the Fed expected that would bring inflation down. But it kept climbing to a 40-year high.

“It was quite eye-catching and we noticed that,” Powell said.

This rate-hike will affect millions of American households and businesses by pushing up the cost of borrowing for major purchases. David Wilcox from the Peterson Institute for International Economics said it will affect first-time homebuyers.

“For people who are first-time homebuyers looking to get that mortgage right now, that’s going to become much more difficult than it would have, a few months ago,” said Wilcox. “People who are in the market to purchase a car are going to have higher borrowing rates today, than they did three months ago.”

He said it was a strong move by the Fed.

“What it could turn out to be,” Wilcox said, “is that a little more action today portends a little less in the future. A little less increase in interest rates, in order to get the inflation job done.”