The US central bank has imposed its third major interest rate rise in a row.
The Federal Reserve has once again hiked rates by 0.75 percentage points in an effort to curb soaring inflation.
The widely-expected rise will mean more expensive borrowing for the likes of mortgage holders and those paying credit card debt.
American interest rates now stand at 3% to 3.25%, up from 2.25% to 2.5% since the last increase in late July.
The latest tough stance has been taken in an effort to limit spiralling inflation, which stood at more than 9% in the US, the fastest increase in 40 years.
The move is likely to bring economic pain, but the regulator is betting that it will be shorter and less intense if it takes tougher action now. Job losses may result as loan repayments become more costly for businesses and consumers have less disposable cash.
The rate had been 0% at the beginning of this year but the regulator has progressively increased the figure across five announcements. The low rate was reached during the pandemic when the regulator wanted borrowing to be cheap for businesses and consumers to remain financially afloat.
Not since the early 1980s has the regulator embarked on such an aggressive monetary tightening campaign.
Prior to Wednesday’s increase, the regulator, known as the Fed, had already upped rates in June and July by what were, at the time, rises not seen since 1994.
Markets had been expecting the announcement and all US stock indices responded negatively to the projected rate hike, ending trading on Tuesday down an average of 1%.
The Fed is just one of many central banks targeting interest rates as inflationary pressures drive the cost of living crises across economies.
On Thursday, the Bank of England is anticipated to also raise its base rate of interest by 0.75% to 2.5%.
It’s a busy week for central bankers as the People’s Bank of China regulator decided to leave interest rates unchanged and the Bank of Japan is predicted to maintain its negative interest rates.