The Federal Reserve has raised interest rates by 75 basis points, the largest single increase since 1994, as the central bank escalates its fight against inflation that has reached 40-year highs. Chair Jerome Powell signaled that additional large hikes may be necessary.

The aggressive move underscores how seriously the Fed views the inflation threat after being slow to recognize its persistence. Consumer prices have risen 8.6% over the past year, eroding household purchasing power and threatening economic stability.

"We are strongly committed to bringing inflation back down," Powell said. "We have the tools and the resolve to do it."