U.S. Fed hikes rates by 75 basis points to double down on inflation

Fed opts for 75-basis-point rate hike, flags weakening economic data

Policy makers, facing the hottest cost pressures in 40 years, lifted the target for the federal funds rate on Wednesday to a range of 2.25 per cent to 2.5 per cent. That takes the cumulative June-July increase to 150 basis points — the steepest since the price-fighting era of Paul Volcker in the early 1980s.

The Fed will also slow the pace of increases at some point, Powell said. In addition, he said officials would set policy on a meeting-by-meeting basis rather than offer explicit guidance on the size of their next rate move, as he has done recently.Article contenttap here to see other videos from our teamThose comments sparked a rally in U.S. stocks as Powell spoke, with Treasury yields tumbling along with the dollar.

Higher rates are already having an impact on the U.S. economy. The effects are particularly evident in the housing market, where sales have slowed.

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