- The Fed is poised on Wednesday to raise interest rates for the sixth time this year.
- The hike will make it more expensive for consumers and businesses to borrow money.
- The central bank is boosting rates to curb inflation, which hovers near a 40-year high. But the higher rates risk pushing the economy into a recession.
The Federal Reserve is poised on Wednesday to raise interest rates for the sixth time this year. That increase will have a direct impact on consumers' wallets, making it even more expensive for them to get a mortgage and pay off credit card debt.
The central bank is boosting rates to curb inflation, which hovers near a 40-year high. September's consumer price index report showed that annual inflation fell slightly to 8.2% but rose by 0.4% on a monthly basis, exceeding economists’ expectations.
The Fed faces growing calls from lawmakers as well at the United Nations to stop hiking rates over concerns that it could ignite a painful recession. But it hasn’t signaled it will hit the pause button time any time soon, as it aims to bring inflation closer to its 2% target, even if it causes job losses.
For now, at least, the labor market remains strong. Job openings are plentiful and unemployment is remarkably low. But economists don’t expect that to be the case in 2023, especially if the Fed continues lifting rates at an aggressive pace. If today's hike comes in as expected -- 75 basis points -- it would mark the fourth straight increase at that high level.
Follow along for our coverage of today’s crucial interest rate decision:
What time is the Fed rate hike decision?
The Fed’s decision comes out at 2 p.m. ET on Wednesday.
— Elisabeth Buchwald
S&P 500 performance during the past five rate hikes
— Jim Sergent
Fed rate hike history 2022
Here's when the Federal Reserve hiked its short-term interest rate this year, and the amount by which it raised that rate.
- March 17: 0.25 percentage point
- May 5: 0.50 percentage point
- June 16: 0.75 percentage point
- July 28: 0.75 percentage point
- September 22: 0.75 percentage point
— Paul Davidson
Dow Jones futures and 2-year Treasury note
Futures for the Dow Jones Industrial Average and S&P 500 index edged lower just before the stock market opened at 9:30 a.m. ET. Yields on 2-year Treasury notes were slightly lower, around 4.53%.
— Elisabeth Buchwald
What time is Powell’s press conference?
Fed Chairman Jerome Powell’s media conference will begin at 2:30 p.m. ET on Wednesday. USA TODAY economics reporter Paul Davidson will cover the event in person.
— Elisabeth Buchwald
What is inflation?:Understanding why prices rise, what causes it and who it hurts most.
What is a recession?:The economic concept explained and what happens during one.
What does it mean when the Fed raises interest rates?
When the Fed raises interest rates it becomes more expensive for banks to borrow money from one another. Banks pass on these higher rates to consumers by making it more expensive for them to get a mortgage, a loan, pay off credit card debt and more.
On the flip side, Fed rate hikes increase the interest you earn on money in a savings account.
— Orlando Mayorquin
How will stock react to the Fed?:Here's how the stock market has moved with all 5 of the Fed interest rate increases
I Bond rates:Why I chose I Bonds to protect my sons' inheritance from 40-year-high inflation
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