The U.S. Federal Reserve raised its benchmark interest rate by 75 basis points, marking the sharpest rate hike since 1994.
The U.S. Labor Department reported Friday that the consumer price index skyrocketed 8.6 percent in May from a year earlier, marking the third straight month of inflation over 8 percent and hitting a new four-decade high. The figures dashed hopes that inflation had peaked.
The central bank raised rates by 25 basis points in March, beginning its rate-hiking cycle as surging inflation in the United States smashed records in four decades. It then raised rates by 50 basis points in May. The 75 basis-point rise was the first such move in decades.
The Fed's shift to a more hawkish stance could lead to spillover effects on emerging markets and low-income countries.
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