The Federal Reserve is poised this week to take the most radical steps it has taken in the last three decades to combat inflation by increasing the cost of borrowing money to purchase a car, a home, a business deal, or a credit card which will compound Americans’ financial strains and likely weaken the economy.
According to a report, with inflation soaring to a record-setting 40-year high, the Fed has been under a lot of pressure to take action in reducing spending and curb the price hikes affecting households and businesses.
Following its most recent rate-setting meeting on Wednesday, the Fed is likely to announce it’s increasing the benchmark short-term interest rate by a half-percentage point, the sharpest rate increase since 2000.
The Fed is likely to announce another half-point rate hike at its next meeting in June and possibly at the next one in July.
Economists foresee still further rate hikes in the following months.
This story originally appeared on Associated Press.