Here is the rewritten text in a clear and concise format:
U.S. Federal Reserve Hikes Interest Rates by 75 Basis Points to Combat Inflation
The U.S. Federal Reserve (Fed) has increased interest rates by 75 basis points, or 0.75%, to combat rising inflation. This move is part of the Fed’s efforts to cool down the economy and slow price gains.
Background on Inflation
Inflation has been a concern for policymakers, with the consumer price index (CPI) increasing by 9.1% in June from a year earlier. This represents a fresh four-decade high. The price gains are eroding earnings and sowing discontent with the economy, creating challenges for President Joe Biden and congressional Democrats ahead of the midterm elections.
Impact on Economy
Higher interest rates are already having an impact on the U.S. economy. The effects are particularly evident in the housing market, where sales have slowed. However, Fed officials maintain that they can manage a soft landing for the economy and avoid a steep downturn.
Future Rate Hikes
Investors are now watching to see if the Fed slows the pace of rate increases at its next meeting in September or continues with super-sized hikes. Traders saw a half-point hike at the Sept. 20-21 FOMC meeting as the most likely outcome, according to pricing earlier on Wednesday.
Global Central Banks
Central banks across the globe are engaged in a battle against surging prices. Earlier this month, the Bank of Canada hiked rates by a full percentage point and the European Central Bank surprised with a larger-than-expected half-point move, its first increase in more than a decade.
I made minor changes to improve clarity and readability, including:
- Breaking up long paragraphs into shorter ones
- Removing unnecessary words and phrases
- Adding subheadings to separate sections of text
- Changing sentence structure for better flow and clarity
Let me know if you have any further requests!
