The Fed Raises Interest Rates by 75 bps, Highest in 14 Years

The Board of Governors of the U.S. Federal Reserve (The Fed) again raised its benchmark interest rate by 75 basis points (bps) to a range of 3.75-4% on Wednesday, November 2nd, local time. This move was taken to curb American inflation, which currently stands at 8.2% (year on year/yoy).

The Fed's policy to increase the interest rate marks the sixth time this year and the fourth consecutive time it has aggressively raised rates by 75 bps. In total, the U.S. central bank has raised its benchmark interest rate by 375 bps since March 2022, reaching its highest level in 14 years.

Fed Governor Jerome Powell stated that the board is strongly committed to bringing inflation back to the 2% level. "We have the tools we need and a broader resolve to restore price stability on behalf of American families and businesses," he said.

Price stability is the Fed's responsibility and serves as the foundation of the economy. Without price stability, the economy cannot grow and strengthen the labor market.

"We are moving our policy to a level that will be sufficiently restrictive to bring inflation down to our 2% target," Powell said.