The Fed hikes rates the most since 2000. Here's the impact.
kSerach: Interest Rates Hike The Federal Reserve is turning to its most potent weapon to combat the highest inflation in 40 years: Boosting interest rates. On Wednesday, the central bank said it is increasing its benchmark short-term interest rate by 0.5%, marking the largest increase since 2000. The Fed's goal is to tamp down demand from consumers and businesses for goods and services. By boosting rates, the thinking goes, it will become more expensive to borrow money to buy a home, car or other needs, prompting some people to hold off on purchases. A drop in demand could help tame inflation, which accelerated to 8.5% in March , the highest increase since 1981. The move shouldn't come as a complete shock to consumers and businesses, given that the Fed already boosted rates by a quarter point in March and signaled that more hikes would be coming. At the same time, Americans have become used to low interest rates for everything from home-buying to auto loans. A half-point hi