News Public Policy News The Balance Today: News You Need To Know on Sept. 22, 2022 The Fed is determined to crush inflation, with higher rates ahead By Diccon Hyatt Updated on September 22, 2022 Fact checked by Lars Peterson Photo: Drew Angerer / Getty Image The Federal Reserve is determined to crush inflation by raising its benchmark interest rate, even if it impacts jobs and economic growth along with it. That was the message the Fed sent yesterday when it raised the fed funds rate by 75 basis points, its third jumbo rate hike in a row, and raised the possibility of further big increases before the year is out. Every boost to the interest rate makes credit card interest, car loans, and mortgage rates steeper, slowing the economy, and making it harder for businesses to hire. The Fed predicted that as a result of its ongoing campaign of rate hikes, the unemployment rate will rise to 4.4% from its current level of 3.7% by next year. That increase in the unemployment rate could mean over 1.2 million more jobless people. “We have got to get inflation behind us,” Federal Reserve Chair Jerome Powell said at a press conference. “I wish there were a painless way to do that. There isn't.” The impact on the job market has yet to show. Just 213,000 people filed for unemployment last week, the Department of Labor said today—only a blip up from last week’s downwardly-revised figure of 208,000, and low by historic standards. As Moody’s Analytics economist Ryan Sweet put it: “Layoffs are low, as businesses are hoarding workers because of the difficulty in filling open positions.” Correction - Sept. 22, 2022: This article has been updated to correct the estimate of the number of additional jobless people that may result from the Federal Reserve's actions. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Board of Governors of the Federal Reserve. “Open Market Operations.” Board of Governors of the Federal Reserve. “Summary of Economic Projections,” Page 2. Federal Reserve Bank of St Louis. “Initial Claims.” Moody’s Analytics. “Indicators: Jobless Claims.”