The Federal Reserve said Wednesday it was raising its short-term borrowing rate another 0.25%, the central bank's second consecutive decision to slow rate increases while extending an effort to cool the economy and dial back inflation. The Fed has put forward a string of borrowing cost increases as it tries to slash price hikes by slowing the economy and choking off demand. The approach, however, risks tipping the U.S. economy into a recession and putting millions out of work.
The Fed's decision comes weeks after a government report showed that inflation slowed in December, marking six consecutive months of easing price increases. At a press conference on Wednesday, Fed Chair Jerome Powell vowed to continue the fight against inflation. While acknowledging that inflation has eased in recent months, he said inflation remains too high and interest rates will need to stay elevated to bring inflation down to normal levels. "Without price stability, the economy doesn’t work for anyone," Powell said. "We will need substantially more evidence to be confident inflation is on a sustained downward path."