The Federal Reserve announced Wednesday that interest rates will be increased by 75 basis points (0.75 percent) in an effort to curb inflation.

This increase is intended to discourage people from borrowing money, as the interest rates will be higher on loans. They believe that if people borrow less, then inflation will go down, which hit 9.1 percent in June.

According to the New York Post, some argue that the decision to increase the lowest possible interest rate could help create a recession.

The governing body said the following in a statement:

Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

As this is breaking news, RedState will provide futher updates when details become available.