Federal Reserve Raises Interest Rates Amid High Inflation

The Federal Reserve has raised interest rates for the first time in over three years. The increase of 0.25% brings the target range to between 3.75-4%. According to Fed Chair Kevin Warsh, inflation is still too high, which prompted this move.

Economist Rick Harper explains that the goal of the rate hike is to slow down inflation by making it more expensive for people to borrow money. 'The Fed wouldn't say it out loud, but that's what they're trying to do,' he said.

Harper notes that higher interest rates will reduce spending and subsequently lower prices. The Fed has been aiming to bring inflation down to 2% for five years, but hasn't succeeded yet.