Fed raises key rate by half-point and signals more to come

Federal Reserve
FILE- In this Feb. 5, 2018, file photo, the seal of the Board of Governors of the United States Federal Reserve System is displayed in the ground at the Marriner S. Eccles Federal Reserve Board Building in Washington. (AP Photo/Andrew Harnik, File)

AP Economics Writer

WASHINGTON (AP) – The Federal Reserve reinforced its inflation fight by raising its key interest rate for the seventh time this year and signaling more hikes to come.

But the Fed announced a smaller hike than it had in its past four meetings at a time when inflation is showing signs of easing.

Though lower than its previous three-quarter-point hikes, the latest move will further increase the costs of many consumer and business loans and the risk of a recession.

The policymakers also signaled that they are prepared to raise their benchmark rate by an additional three-quarters of a point and leave it there through 2023.

Some economists had expected that the Fed would project only an additional half-point increase.