A third consecutive three-quarter-point hike has been announced by the Federal Reserve, marking a historic moment as it continues to try and curb inflation.
The economy is expected to slow to a crawl due to the rise in key interest rates, but the Fed continues on its path to lower the four-decade high inflation facing the country.
On Wednesday, the Federal Reserve also announced its plans for rate hikes in the future. The dot plot will see key interest rates hit 4.6% in 2023 before the bank loosens its tightening campaign.
However, don't expect the increases to stop just yet, as, by the end of this year, key interest rates are expected to hit 4.4%, up from June's projection of 3.4%.
Upon the announcement of the rate hike, the stock market acted accordingly. The Dow fell by 244 points or 0.8%. The S&P 500 was also down by 0.8%. But, the Nasdaq Composite went the other direction, rising 0.9%.
In its announcement, the Fed also gave an update on its forecasts for unemployment this year, sharing that it expects its previous estimate to rise by 0.1%, ending the year at 3.8%. As for personal consumption expenditures, the preferred measure of inflation for Fed members, is projected to rise 5.4% in 2022.
The good news, although it's hard to see at the moment, is that the historic hikes won't last forever, according to Fed Chair Jerome Powell.
Powell shared on Wednesday that the goal of the Fed is to get inflation down to 2% annual growth, which the bank considers healthy growth. But getting there isn't going to be pretty.
"To accomplish that, we'll need to do two things in particular: ... a period of growth below trend and softening in labor market conditions to foster a better balance," Powell said.