US Fed hikes interest rate by 75 bps, biggest since 1994: Highlights

• The Fed raised its benchmark rate by 75 basis points – the biggest increase since 1994 – to a range of 1.5%-1.75%, in line with investors' and economists' expectations
• Jerome Powell says Fed could hike rates by 0.75 again in JulyAnalysts increasingly see a recession looming in the US following the Federal Reserve’s biggest increase in interest rates since 1994 and signs of weaker consumer spending.

  The Fed hiked its policy rate by 75 basis points Wednesday to a range of 1.5% to 1.75%, as officials intensified their battle against inflation that’s remained stubbornly high.

• The Federal Reserve approved the largest interest rate increase since 1994 and signaled it would continue lifting rates this year at the most rapid pace in decades as it races to slow the economy and combat inflation that is running at a 40-year high.

  Officials agreed to a 0.75-percentage-point rate rise at their two-day policy meeting that concluded Wednesday, which will increase the Fed’s benchmark federal-funds rate to a range between 1.5% and 1.75%.

• New projections showed all 18 officials who participated in the meeting expect the Fed to raise rates to at least 3% this year, with at least half of all officials indicating the fed-funds rate might need to rise to around 3.375% this year.

  Fed Chairman Jerome Powell said at a news conference that the central bank wasn’t trying to induce a recession. But he said it was becoming more difficult to achieve a so-called “soft landing,” in which the economy slows enough to bring inflation down while avoiding a recession. That represented an implicit concession that the risks of a downturn could rise as the economy digests tighter monetary policy.

  “The events of the last few months have raised the degree of difficulty” of achieving a soft landing, Mr. Powell said. “There’s a much bigger chance now that it’ll depend on factors that we don’t control. Fluctuations and spikes in commodity prices could wind up taking that option out of our hands.”