Fed ups interest rate 0.75 points amid inflation fears

WASHINGTON, D.C. (CNN) – The Federal Reserve hiked interest rates by three-quarters of a percentage point Wednesday in an unprecedented move to head off inflation.

Americans are concerned as prices rise and economists talk about a potential recession.

An economic adviser for the Biden administration says the pandemic and Russia’s invasion of Ukraine has changed the way they look at the economy, but adds avoiding a recession is still possible.

“The Federal Reserve has been, has been looking at the data from a position where our economy is very unusual because we just haven’t been here before,” said Cecilia Rose with the White House Council of Economic Advisers. “But they are focused on trying to address this. Yes, it’s not a given that they will be able to pull this off without causing — without causing recession. But because of the buffer that was generated by the historic growth that we had last year, the very strong labor market that we’ve got, there is a path by which we can… the Fed could generate what Alan Blinder, my colleague of mine at Princeton — I’m a professor at Princeton when I’m not on leave here at the White House — has called a soft-ish landing. So there is a path. Not to say that it’s gonna be easy, but that is what they are attempting do.”

Biden is set to talk with China’s president Thursday. Officials have not said whether the two will discuss lifting tariffs imposed by the Trump administration. Economists speculate doing so could help reduce prices for some consumer goods

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