The Federal Reserve hiked interest rates for the ninth consecutive day on Wednesday, opting to continue its campaign against high inflation despite tensions in the banking sector following the collapse of two regional banks. Fed policymakers unanimously voted to raise the reference rate by a quarter of a percentage point to just under 5 percent, making it more expensive for those looking for car loans or holding credit card balances.
Fed Rate Setting Committee members believe that slightly higher interest rates may be needed to restore price stability. Policymakers expect interest rates to rise another quarter of a point on average by the end of this year, according to new forecasts also released on Wednesday.
“My colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher cost of essentials like food, housing, and transportation,” Fed Chairman Jerome Powell told reporters at a news conference after the meeting.