The Federal Reserve raised interest rates to the highest since 2008

- To combat inflation, the Fed raised interest rates by 0.75 percent, signaling further hikes

- Stocks fall, dollar rises as Federal Reserve raises interest rates

Ahmedabad: The Federal Reserve today announced a 0.75 percent increase in the fed funds rate in the United States. With this, the interest rate has now increased from 3 to 3.25 percent. Along with this, the economic growth rate in America has been reduced to only 0.25 percent. Such high interest rates were last seen in 2008.

The announcement of this decision saw a drop in the stock market. The Dow Jones index, which had increased by 150 points, fell by 130 points after the announcement.

Along with today's interest rate hike, the Fed has also forecast that interest rates could range from 4 to 4.4 percent in 2023. This indicates a growth of 0.50 percent over the previous meeting

In the current calendar year i.e. 2022, the Fed has hiked interest rates five times in total with today's rate hike to curb inflation. The growth of 0.75 percent in June was the highest in the last 18 years.

In the month of August, the rate of inflation in America has been partially reduced to 8.3 percent. Even after the decline, it is at a 40-year high.

Prior to today's meeting, the Federal Reserve's interest rate ranged from 2.25 percent to 2.5 percent. The interest rate at which banks have to pay interest when they are short of cash and borrow money from another federal bank is called the federal funds rate.