Fed Approved Largest rate hike Since 1994 to Halt Rising Inflation

The Federal Reserve on Wednesday approved its biggest interest rate hike since 1994 to stop the growing inflation that U.S. central bank officials acknowledged may be decreasing their public trust in their power, and due to the events beyond their control. The widely expected move increased the target federal funds rate up to three-quarters of a percentage point that ranges between 1.5% and 1.75%.

Fed's hawkish commitment to controlling inflation has already touched off a broad tightening of credit conditions being felt in U.S. housing and stock markets, and likely to slow demand throughout the economy, Reuters reported.

"We don't seek to put people out of work," Fed Chair Jerome Powell said at a news conference after the end of the Fed's latest two-day policy meeting, adding that the central bank was "not trying to induce a recession."

Powell also said, "Our objective really is to bring inflation down to 2% while the labor market remains strong ... What's becoming clearer is that many factors that we don't control are going to play a very significant role in deciding whether that's possible or not" while citing the war in Ukraine and global supply concerns.

"There is a path for us to get there ... It is not getting easier. It is getting more challenging," he added.

©Photo: Financial Times