Federal Reserve Raises Rates by Three-quarters of a Percentage Point

November 2, 2022

At its November meeting, the Federal Reserve approved a fourth consecutive three-quarter point interest rate increase as part of its efforts to bring down inflation.

The rate-setting Federal Open Market Committee (FOMC) raised the fed funds rate, the amount that banks charge each other for overnight loans, to 3.75%-4%, the highest it has been since January 2008.

The meeting’s statement expanded on prior messages where the Fed had stated “ongoing increases in the target range will be appropriate.” According to the new statement, “ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.”

In his news conference, Fed Chair Jerome Powell said he expects a discussion at the next few meetings about starting to slow the pace of rate increases but does not know when the Fed will take action on slowing the pace. Powell also said he now expects the terminal rate to be higher than was predicted at the September meeting.