Fed Confirms Largest Rate Hike in 22 Years

The US Federal Reserve announced an interest rate hike of a half-percentage point in an attempt to take control of the worst inflation America has seen in 40 years.

The central bank has not hiked rates this much in 22 years. The decision was unanimous, with all 12 members of the policy-setting Federal Open Market Committee agreeing on it.

As recently as March, the Fed ramped up its benchmark borrowing rate for the first time since late 2018, increasing it by a quarter-percentage point.

Fed Chairman Jerome Powell said that additional half-percentage-point rate hikes will be on the table for the next few meetings.

Americans are battling with high costs at the gas pump and in grocery stores. Powell addressed Americans directly by saying, “Inflation is much too high, and we understand the hardship it is causing. We are moving expeditiously to bring it back down."

What does this mean for me? 

With the Russia-Ukraine conflict still raging, price pressures on food and energy are unlikely to decrease any time soon.

Central banks all over the world have been raising interest rates to fight inflation. As a savvy investor, now is the time for you to carefully adjust your portfolio in anticipation of further monetary tightening moves around the world.

If a recession appears, as many analysts are predicting, this will have a negative effect on the stocks and indices in your portfolio. If you are a commodities investor, you will likely see more action as other investors flood commodity markets in search of stability.