The Fed has approved a rare 0.5% interest rate increase, marking the largest increase since 2000, to tamp down demand from consumers and businesses for goods and services.
By boosting rates, it will become more expensive to borrow money to buy a home, car or other needs, prompting consumers to hold off on purchases. A drop in demand could help tame inflation.
With the boost, the federal funds rate will likely sit at 1%, compared with 6.5% when the central bank last raised rates by the same amount in 2000. Learn more.