Black Friday Sale! 50% Off All Access

Fed Approves First Interest Rate Hike Since 2018. And There's More to Come. The increase of 0.25 percentage points is planned to be one of several.

By Chloe Arrojado

Entrepreneur+ Black Friday Sale

Our biggest sale — Get unlimited access to Entrepreneur.com at an unbeatable price. Use code SAVE50 at checkout.*

Claim Offer

*Offer only available to new subscribers

Pool | Getty Images

On Wednesday, the Federal Reserve approved an interest rate hike for the first time since December 2018. The increase of 0.25 percentage points is planned to be one of several, as the Fed plans to raise rates at each of its six remaining meetings scheduled for the year.

"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong," the Fed wrote in a Wednesday statement. "In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate."

Related: How to Use Alternative Assets as a Hedge Against Inflation

The Fed cited pandemic-related supply and demand imbalances and higher energy prices as some of the factors driving the rate hike. It also emphasized Russia's invasion of Ukraine as a factor in that the conflict has been "causing tremendous human and economic hardship" and creating "additional upward pressure on inflation and weigh on economic activity."

Since March 2020, the Fed has kept interest rates near zero as the US economy was affected by Covid. But now that the economy is recovering its job losses and showing more signs of activity, the Fed is more focused on addressing inflation ⁠— which is the highest the country has seen in 40 years.

"The Committee is determined to take the measures necessary to restore price stability," Federal Reserve chair
Jerome Powell said at a press conference on Wednesday. "The American economy is very strong and well positioned to handle tighter monetary policy."

Related: 3 Inflation-Proof ETFs to Put into Your Portfolio

Chloe Arrojado

Entrepreneur Staff

Editorial Assistant

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

'Father Time Always Wins': Warren Buffett, 94, Just Announced Major Changes to His Plan to Give Away His Money

Warren Buffett continued his Thanksgiving tradition with a $1.1 billion donation of Berkshire Hathaway stock to four of his family's foundations.

Starting a Business

Best Friends' 'Scrappy' Side Hustle Led to a Product on Track for $1 Million Annual Sales: 'Rare to Find Somebody With This Same Passion'

Alissa Sullivan and Leslie Hendin, co-founders of Liis, immediately bonded over their fragrance obsession when they met at a wedding in 2009.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Growing a Business

Unlock Long-Term Business Success by Instilling These 5 Family Values

The core principles that hold a family together can also help you grow and maintain your business effectively. Here's what I've learned from my family business.

Marketing

3 Cybersecurity Marketing Trends You Can't Ignore

Cybersecurity is an industry whose fate relies solely on trust. These 3 trends show proof of how trust and marketing are starting to intertwine at an unprecedented rate.