The Federal Reserve raised the short-term interest rates by a quarter of a percentage point yesterday, bringing the benchmark rate to a new range of 4.5% and 4.75%, the highest level since October 2007.
Since last year, the Fed’s interest rate hikes have helped cool the runaway inflation. Prices eased for the third consecutive month in December, with the consumer price index (CPI) rising 6.5% year-over-year and declining 0.1% sequentially. Fed Chair Jerome Powell sounded optimistic about inflation, saying, “We can now say for the first time that the disinflationary process has started.”
