Earlier today the Federal Reserve announced its plan to raise interest rates by .75% in an effort to curb inflation. According to the board’s press release,
Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures. The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
The Fed acknowledged, during their press conference and afterwards on twitter, that their decision will result in hardship for many Americans who are already experiencing economic strain.
To read a transcript of the meeting click here.