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Market Update

Fed Steps Up the Pace of Rate Hikes to Fight Inflation

Investors should expect additional rate increases even as Powell throws cold water on the idea of a still more aggressive path.

As expected, the Fed announced a 0.5-percentage-point increase in the federal-funds rate Wednesday, as well as plans to reduce its portfolio of long-term securities. Back in March the central bank raised interest rates for the first time since the onset of the pandemic recession, when it took the funds rate from zero to 0.25%. The half-point increase at Wednesday's meeting was the first rate hike of that size in 22 years.