Fed raises interest rate to 28-year high

WASHINGTON, D.C.: The Federal Reserve (Fed) intensified its fight against high inflation on Wednesday (Thursday in Manila) by lifting its key interest rate by three-quarters of a point — the largest bump since 1994 — and signaling more rate hikes ahead as it tries to cool off the United States economy without causing a recession.

The unusually large rate hike came after data released last Friday showed that US inflation rose last month to a four-decade high of 8.6 percent — a surprise jump that made financial markets uneasy about how the Fed would respond. The US central bank's benchmark short-term rate, which affects many consumer and business loans, will now be pegged to a range of 1.5 percent to 1.75 percent — and policymakers forecast a doubling of that range by year's end.