Fed raises interest rates by 75 basis points for 4th-straight meeting

Yahoo Finance's Jennifer Schonberger breaks down the Federal Reserve's November policy decision to raise interest rates by 0.75% for the fourth-straight time since June.

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- Let's get more from Jen Schonberger ahead of the big decision from Jerome Powell. Hi, Jen.

JENNIFER SCHONBERGER: Rate hike, the Federal Reserve raising its short-term benchmark interest rate by 3/4 of a percentage point to a new range of 3 and 3/4 to 4%. Now, the Fed laying the table for perhaps a slowdown on future rate hikes, saying in the statement that in determining future rate hikes, they will take into account the cumulative effect and the lag in monetary policy on the economy, inflation, and financial developments.

The Fed reiterated that it expects ongoing increases in the interest rate until it achieves a level that is, quote, "sufficiently restrictive to get inflation back down to that 2% level." Now, the Fed still views inflation as high and views the job market as strong, appointing to stop strong job gains and a low unemployment rate.

This marks the fourth straight 75-basis-point rate hike since June, an unprecedented move for the Federal Reserve since it started explicitly targeting the Fed funds rate back in the late 1980s. The vote was unanimous. And while the Fed pulled another jumbo rate hike today, we will wait to hear from Fed Chair Powell on whether he will signal slower rate hikes ahead. We'll get more from him in less than 30 minutes' time. Back to you.

- Yeah, Jen, the rate hike this afternoon taking rates to the highest level that we've seen since January of 2008. When you take a look at this statement-- I know you're just getting a couple of minutes here to look through this, but how has the language evolved from the last meeting? Because a lot of the focus, at least from the market's perspective, is what it's signaling when it comes to December, then out into 2023.

JENNIFER SCHONBERGER: Right. So as I mentioned, Seana, the major thing that changed in the statement is that they seem to be setting the table for perhaps a slowdown in the pace of rate hikes. Some might call it a potential pause at some point going forward. I see it as a slowdown. They said that in determining the path forward for future rate hikes, they're going to take into account the cumulative impact of rate hikes that have already been done, as well as that lag effect, right?

Typically, there's an 18-month lag effect when it comes to monetary policy. So they're going to take that into account as they look at the impact on the economy, inflation, and financial developments.