URGENT: Fed decides on biggest rate hike in over 20 years to tackle inflation

© Kyodo News

The U.S. Federal Reserve said Wednesday it will raise key interest rates by half a percentage point, the biggest rate hike since May 2000 as it rushes to address rising inflation.

Upon concluding a two-day meeting of the policy-setting Federal Open Market Committee, the bank said it decided to lift its target range for the federal funds rate to 0.75 to 1.00 percent, as widely expected.

The Fed also said it will start on June 1 reducing the size of its balance sheet, which has swelled to around $9 trillion due to its asset purchases that have been conducted to support the coronavirus pandemic-hit economy.