US Fed raises interest rates 75 basis points for 3rd straight time

By Ovunc Kutlu

ANKARA (AA) - The US Federal Reserve raised its benchmark interest rate Wednesday by 75 basis points for the third consecutive time to fight record inflation.

The Federal Open Market Committee (FOMC) unanimously decided to raise the target range for the federal funds rate to the 3.00% - 3.25% range.

The decision comes after the central bank made an interest rate increase of 75 basis points June 15, the largest in 28 years, and followed it with another hike of 75 basis points July 27.

The Fed has so far raised rates a total of 300 basis points, or 3%, since March, while the FOMC said it "anticipates that ongoing increases in the target range will be appropriate."

"Recent indicators point to modest growth in spending and production,” the Fed said in its monetary policy decision statement. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures."

The FOMC said it seeks to achieve inflation at 2% in the longer run, adding it is "highly attentive to inflation risks."

The Fed's aggressive rate hikes come amid rising consumer and producer prices which are hovering around their highest in 40 years.

Consumer inflation showed an annual increase of 8.3% in August, above the 8.1% market estimate, while it peaked at 9.1% in June.