US central bank pushes interest rates to highest level in almost 15 years as it fights to rein in inflation

The US central bank has pushed interest rates to the highest level in almost 15 years as it fights to rein in soaring prices in the world’s largest economy. The Federal Reserve yesterday announced the increase in key rate by another 0.75 percentage points.

Federal Reserve Chairman Jerome Powell said that Fed policymakers unanimously agreed to raise the central bank’s benchmark overnight interest rate to a range of three to 3.25 per cent. He said, the rate rises were necessary to slow demand, easing the pressures putting up prices and avoiding long-term damage to the economy.

The bank said that borrowing costs are expected to climb more and remain high. The move comes despite mounting concern that the cost of controlling inflation could be a harsh economic downturn. According to media reports, banks in nearly every country are facing similar trade-offs as they raise rates to combat their own inflation problems.