The Federal Reserve raised its baseline interest rate range Wednesday by two times the size of a usual rate hike as the central bank sprints to get ahead of rising inflation.

The Federal Open Market Committee (FOMC), the panel of Fed officials in charge of monetary policy, boosted interest rates by 0.5 percentage points to a target range of 0.75 to 1 percent. The bank has not raised interest rates by more than 0.25 percentage points at a single FOMC meeting since May 2000.

After leaving rates near zero for all of 2021, Fed Chairman Jerome Powell and other bank leaders have pledged to quickly bring borrowing costs back toward levels that won’t stimulate the economy.

Top Fed officials all but confirmed they would hike rates by 0.5 percentage points in the weeks leading up to the May FOMC meeting after approving a 0.25 percentage point hike in March. All 10 voting member of the FOMC supported the decision.

Consumer prices rose 6.6 percent over the 12 months ending in March, according to personal consumption expenditures price index, the Fed’s preferred gauge of inflation. The Fed aims for annual inflation of 2 percent each year.

“Inflation is much too high and we understand the hardship it is causing. And we’re moving expeditiously to bring it back down,” Powell said during a Wednesday press conference.
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