Addressing today’s incredibly complicated and unusual economic conditions, the Federal Reserve announced it will raise interest rates by a 0.25 percentage points in an effort to stem inflation while also addressing recession fears, the Washington Post reports.
“Recent indicators point to modest growth in spending and production,” the Federal Reserve statement announcing the increase read. “Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation has eased somewhat but remains elevated.”
The US economy is in an unusual state: in 2022, it experienced two consecutive quarters of shrinkage which would normally signal a recession, but still saw strong consumer data and steady job growth throughout the year, two things that are not common in a recession. In its comments about the eighth rate hike in a little over a year, the Fed noted that it will likely have to raise interest rates again in the future to fine-tune controls on inflation while not killing consumer demand, a key driver of the American economy.