The Federal Reserve on Wednesday demonstrated it wanted to be aggressive in its fight against inflation, approving its largest interest-rate hike in almost three decades and signaling that its benchmark rate will rise near 4% by the end of next year. At the central bank’s meeting that ended Wednesday, officials said they would hike the federal funds target rate by three-quarters of a percentage point to between 1.5% and 1.75%.
In its so-called dot-plot forecast of benchmark interest rates, the Fed indicated it planned to raise the fed funds rate to a midrange of 3.4% by the end of this year and to 3.8% by the end of 2023. Fed officials anticipate being able to cut rates slightly in 2024. There was only one dissent. Kansas City Fed President Esther George preferred a half-percentage-point hike. Fed Chairman Jerome Powell said the Fed might raise interest rates at its next meeting by another 75 basis points, but, he cautioned, “I do not expect rate increases of this size to be common.” In its policy statement, the Fed said it is strongly committed to getting inflation down to 2%, the annual inflation rate it has traditionally targeted …