The Federal Reserve raised interest rates by three-quarters of a percentage point on Wednesday, continuing its aggressive campaign to cool rapid inflation.
The policy-setting Federal Open Market Committee signaled in its post-meeting statement that more is coming, saying that it "anticipates that ongoing increases in the target range will be appropriate."
The Fed's policy rate, which trickles out through the economy to affect other borrowing costs and curtail growth, is now set to a range of 2.5% to 2.5%.
The Fed raised interest rates from zero to 0.25 percent in March. They raised by half a point in May and three quarters of a point in June, which was the largest step since 1994.
The Fed made a second big increase on Wednesday because they are trying to control inflation.
While officials acknowledged in their statement that spending and production data have softened, they also pointed out that job gains have beenrobust and that prices continue to increase quickly.
After more than a year of rapid cost increases, central bankers are worried that Americans might start to expect inflation to last. Inflation could become a permanent feature of the economy if people and businesses begin to adjust their behavior in anticipation of rising prices.
There is a campaign against price increases being waged by other countries. Russia's war in Ukraine and the Pandemic have caused inflation to accelerate around the world. In order to slow their own economies down, many central banks are lifting interest rates very quickly.
The higher the interest rates, the lower the inflation. Mortgages are less popular when money costs more to borrow. Less economic activity can cause the supply of goods and services to fall behind demand. Job and wage growth decline as companies face weaker profits and sales.
The Fed acknowledges that slowing the economy is painful and that its fight to control inflation risks tipping the economy into a recession.