The US Federal Reserve is raising interest rates for the first time since 2018 in an attempt to bring fast-rising prices under control.
The US central bank said it was lifting its benchmark rate by 0.25 percentage points and signalled plans for further rate rises in the months ahead.
The move comes as the economy faces new uncertainty caused by the Ukraine war and coronavirus outbreaks in China.
They are expected to have widespread global repercussions.
By raising rates, the Fed will make it more expensive for households, businesses and governments to borrow.
It is hoping that will cool demand for goods and services, helping to ease price inflation in the US, which hit a new 40-year high of 7.9 percent last month.
The plan is to restore price stability while also maintaining a strong labour market,” Federal Reserve Chairman Jerome Powell said.
That is our intention and we believe we can do that but we have to restore price stability.”
We’re not going to let high inflation become entrenched,” he said.
The costs of that would be too high.”