Federal Reserve announces interest rate hike as inflation nears target

WASHINGTON (Nexstar) – The Federal Reserve announced another small interest rate hike, saying that while inflation has dropped to almost the target rate, the hike is needed to finish the job.

Federal Reserve Chair Jerome Powell announced the quarter percent hike, explaining, “we understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal.”

Although the Federal Reserve has knocked inflation down to 3% as of June, Powell says that's still too high.

“Without price stability, the economy doesn't work for anyone,” Powell said.

Senate Majority Leader Chuck Schumer says with inflation well on its way to stabilizing, the U.S. economy is strong. He also credits the work of Democrats and the Biden administration.

“As the new jobs are being created, wage growth continues to go up. It's now exceeding inflation,” Sen. Chuck Schumer (D-NY) said.

Republicans like Senator Josh Hawley say Democrats are to blame for high inflation and still-rising interest rates, which they say is a result of too much money being pumped into the economy by the government.

“What they were affective at doing was getting us these massively high interest rates,” Sen. Josh Hawley (R-MO) said.

Sen. Mitch McConnell (R-KY) added, “folks who work for a living and manage family budgets know that Bidenomics has made their lives harder.”

In addition to this interest rate hike, Chair Powell left the door open to at least one more interest rate hike, which Hawley says will make it “more expensive for every worker out there, to afford anything; a home, car, you name it.”