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The Fed Increases Interest Rates

The action signals an aggressive battle against inflation

on Wednesday, the Federal Reserve raised interest rates by a quarter of a percentage point and laid out an aggressive plan to push borrowing costs to restrictive levels by next year as concerns about high inflation and the war in Ukraine overtook the risks of the coronavirus pandemic.

The U.S. central bank, in a surprise move, projected the equivalent of quarter-percentage-point rate increases at each of its six remaining policy meetings this year, which would push its benchmark overnight interest rate to a range between 1.75 percent to 2.00 percent by the end of 2022. It is projected to further rise to 2.80 percent by the end of 2023, above the 2.40 percent level officials now feel would slow the economy.

Fed Chair Jerome Powell, speaking after the end of the latest two-day policy meeting, said the economy is strong and that officials will raise rates more aggressively at future meetings if needed to control inflation.

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