The Federal Reserve on Wednesday hiked interest rates by 0.75% in its most aggressive action yet to tackle inflation, CNN reports.
The big hike sets the Fed’s benchmark lending rate between 3% and 3.25%, the highest rate since the 2008 global recession.
The move is expected to raise the cost of borrowing for purchases of homes and cars and for credit cards.
“No one knows whether this process will lead to a recession or, if so, how significant that recession would be,” Fed Chairman Jerome Powell acknowledged on Wednesday.
Sen. Elizabeth Warren on Wednesday slammed Powell’s decision for putting workers at risk.
"Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment," she said. "I've been warning that Chair Powell's Fed would throw millions of Americans out of work—and I fear he's already on the path to doing so."
Former Labor Secretary Robert Reich said that "raising interest rates puts the burden of fighting inflation on low-wage workers” instead of corporate profits.
More hikes coming:
Fed officials also forecast additional hikes, predicting the benchmark rate would rise to roughly 4.4% by the end of the year and to 4.6% next year.
Central banks around the world have made similar moves to combat inflation.
The Bank of England on Thursday increased its interest rate for the seventh time to its highest level in 14 years.
Sweden’s central bank earlier this month raised its interest rate by a full point.
And the European Central Bank announced the largest-ever interest rate hike for the 19 countries that use the euro.