The federal reserve announced another interest rate hike as part of ongoing efforts to lower inflation.

WASHINTON (Nexstar) -- The federal reserve announced another interest rate hike as part of ongoing efforts to lower inflation.

The move comes as the government is quickly approaching a point in which it could default on its debts and obligations, which the Federal Reserve chairman warns would be unprecedented.

“We have raised interest rates by five percentage points in a little less than a year,” Federal Reserve Chair Jerome Powell said.

Powell announced another quarter point interest rate hike on Wednesday and says they have worked to cool down the housing and investment markets, which is helping to lower inflation.

"We are seeing other effects of our policies tightening on demand," Powell said.

Inflation still hasn't decreased to the target two percent mark, but the bigger economic concern is quickly becoming whether the United States government could default on its loans and obligations.

“We understand there is more work to do,” White House Press Secretary Karine Jean-Pierre said.

In Congress, Republicans are blocking the government from raising the debt limit until Democrats agree to major spending cuts.

“The underlying cause of that inflation is, make no mistake, excessive federal spending. That's why it would be so unwise so careless, so thoughtless, so reckless to increase the debt ceiling yet again,” Sen. Mike Lee (R-UT) said.

Indiana Republican Senator Mike Braun added, “you want to replace the real economy with the sugar high of more government."

Meanwhile, Democrats accuse Republicans of playing games with the stability of the economy and say that if Republicans want spending cuts – which means cuts to programs -- that issue should be legislated separately.

“We have less than a month to go until we get close to June first, every day wasted is another day closer to catastrophe,” Sen. Chuck Schumer (D-NY) said. “A Republican default would crash the economy, increase costs, kill American jobs. Unemployment would rise to at least eight percent. Mortgage and car payments would go up by a lot.”

In his remarks Chair Powell warned that if the country does default, the Federal Reserve may not be able to do much to save the economy.