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Fed raises rates by half a percentage point — the biggest hike in two decades — to fight inflation

  • The Federal Reserve increased its benchmark interest rate by half a percentage point, in line with market expectations.
  • In addition, the central bank outlined a program in which it eventually will reduce its bond holdings by $95 billion a month.
  • The rate move is the largest since 2000 and is in response to burgeoning inflation pressures.
  • Fed Chairman Jerome Powell underlined the commitment to bringing inflation down but indicated that raising rates by 75 basis points at a time “is not something the committee is actively considering.”