HOUSTON — The Federal Reserve is making another major move to try and slow inflation but doing so will make it more expensive to borrow money.
"High inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher cost of essentials like food, housing and transportation," said Federal Reserve Chairman Jerome Powell.
On Wednesday, Chairman Powell and the Fed board raised a key rate .75%. It’s the fifth hike this year.
This move comes as prices for essentials continue to rise. Electricity bills are up 15.8% compared to a year ago. Housing is also up 6.2% and prices at the grocery store soared to 13.5%.
"I think they are ridiculous,” said shopper Henry Towns. “They are outrageous."
The Fed’s latest move is designed to slow down the economy and ease rising prices but it’s also pushing up loan costs.
A new survey from Bankrate found the average credit card interest rate is more than 18%.
Even though the Fed doesn’t directly set fixed mortgage rates, they continue to soar. A 30-year fixed mortgage rate is just over 6%. That’s more than double from a year ago.
"Fed officials see fighting inflation as job one," said CBS Business Analyst Jill Schlesinger. "If policy starts to work, the economy will slow down by enough, hopefully by not too much, to create a recession."
The Federal Reserve is expected to raise rates two more times this year. The next hike could come in November.