What is the impact of rising interest rates?
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(CNN) ––
The United States Federal Reserve made history again this Wednesday by approving a 0.75% increase for the third consecutive time, in its battle to curb the unleashed inflation that hits the economy, while affecting the consumers and suffocates the administration of President Joe Biden.
The sizeable increase, which seemed inconceivable to markets just a few months ago, brings the central bank's benchmark interest rate to a new target range of 3%-3.25%.
This figure represents the highest fed funds rate since the global financial crisis in 2008.
The Fed's move represents the central bank's toughest policy in its fight against inflation since the 1980s, another period of skyrocketing prices.
This decision is likely to cause economic hardship for millions of American businesses and households by increasing the cost of home, auto, and other credit.
Federal Reserve Chairman Jerome Powell has acknowledged the economic pain this fast-tightening regime can cause.
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