Fed raises interest rates by half-point, the most since 2000

in 40 years by raising its benchmark short-term interest rate by a half-percentage point Wednesday — its most aggressive move since 2000 — and signaling further large rate hikes to come.

All told, the Fed’s credit tightening will likely mean higher loan rates for many consumers and businesses over time, including for mortgages, credit cards and auto loans. With prices for food, energy and consumer goods accelerating, the Fed’s goal is to cool spending — and economic growth — by making it more expensive for individuals and businesses to borrow. The central bank hopes that higher borrowing costs will slow spending enough to tame inflation yet not so much as to cause a recession.

Inflation, according to the Fed's preferred gauge, reached 6.6% last month, the highest point in four decades. Inflation has been accelerated by a combination of robust consumer spending, chronic supply bottlenecks and sharply higher gas and food prices, exacerbated byStarting June 1, the Fed said it would allow up to $48 billion in bonds to mature without replacing them, a pace that would reach $95 billion by September.

Yet by most measures, the overall economy remains healthy. This is especially true of the U.S. job market: Hiring is strong, layoffs are few, unemployment is near a five-decade low and the number of job openings has reached a record high. Even if the Fed’s benchmark rate were to go as high as 2.5% by year’s end, Powell said last month, the policymakers may still tighten credit further — to a level that would restrain growth — "if that turns out to be appropriate."

Raising interest rates is like putting your finger in a hole of a sinking boat. Most people can not afford homes and cars which are the leading interest makers. Inflation is already curbing spending, unless your the government, they seem like they have plenty

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