The Federal Reserve raised its benchmark interest rate by three-quarters of a point for a second straight time in its most aggressive drive in three decades to tamp inflationary pressures. The Fed set the new benchmark interest rate to a target range between 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate.

Today’s rate hike matched the Fed’s last move in June, its most significant single-meeting rate increase since 1994. Wednesday’s decision was unanimously agreed upon by voting members of the Federal Open Market Committee.

According to a statement:

Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. 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. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

The press release issued by the Board of Governors of the Federal Reserve System is available here.