In its ongoing, and so far unsuccessful, battle to quell record U.S. inflation, the Federal Reserve on Wednesday decided on another jumbo boost to its benchmark interest rate.

The .75% increase mirrors the uptick the monetary body levied last month and marks the fourth rate increase so far this year, part of the most aggressive strategy seen in decades to make credit and debt more expensive in hopes of cooling down an overheated U.S. economy.

The decision comes on the heels of a recent report from the U.S. Labor Department that pegged year-over-year inflation in June at 9.1%, the highest jump on the prices of consumer goods and services since 1981.

U.S. consumers are now paying for groceries that are up 10.4% over last year, gas that’s up nearly 60% over 2021 and shelter expenses that have risen 5.6% since June 2021.

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Why are rates still going up?: Raising the interest rate on federal funds borrowing is widely considered by economists, and the Fed itself, to be an imprecise instrument when it comes to addressing inflation, but it’s one of the few tools at its disposal.

The point of the exercise is to make credit more expensive to dissuade consumers from borrowing or accruing debt and, thusly, lowering the rate of consumer spending. Theoretically, when consumers spend less, the overall prices of goods and services come down.

But, the series of rate increases over the past year have also raised worries that putting too much downward pressure on spending could push the U.S. economy into a recession, a term defined as an extended period of time in which economic activity decreases.

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Right now, the economy is showing some signs of slowing as mortgage rate increases have slowed the housing market and consumer confidence has been trending downwards. The Fed is tightening credit even while the economy has begun to slow, thereby heightening the risk that its rate hikes will cause a recession later this year or next.

But, Fed chairman Jerome Powell says the country hasn’t hit a recessionary period, at least at the moment.

“I do not think the U.S. is currently in a recession,” Powell said Wednesday at a news conference.

And Powell hinted that while further interest rate hikes this year are part of the plan, the pace of those increases is likely to slow down.

“As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation,” Powell said.

The central bank is betting that it can slow growth just enough to tame inflation yet not so much as to trigger a recession — a risk that many analysts fear may end badly.

In a statement the Fed issued after its latest policy meeting ended, it acknowledged that while “indicators of spending and production have softened,” “job gains have been robust in recent months, and the unemployment rate has remained low.” The Fed typically assigns high importance to the pace of hiring and pay growth because when more people earn paychecks, the resulting spending can fuel inflation.

What higher rates mean for consumers: Per the stated goal of the Fed, raising its benchmark rate hits consumers directly in their pocketbooks, but the changes can be seen and felt in some areas faster than others.

Mortgage loans: The current average borrowing rate for a 30-year fixed rate mortgage stands at 5.54% according to data collected by Freddie Mac. That rate is more than double the 2.76% rate from a year ago, but down a bit from the 5.8% average of late June.

While the Fed’s latest rate increase could push mortgage rates up, a slowing housing market could help counter the impacts and bring average mortgage rates down a bit along with the cost of an average home.

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And that’s what Freddie Mac noted in a comment posted with data that was updated last week.

“Consumer concerns about rising rates, inflation and a potential recession are manifesting in softening demand,” the note from Freddie Mac reads. “As a result of these factors, we expect house price appreciation to moderate noticeably.”

Car loans: Fed rate hikes can make auto loans more expensive. But other factors also affect those rates, including competition among carmakers that can sometimes lower borrowing costs.

Rates for buyers with lower credit ratings are most likely to rise as a result of the Fed’s hikes. Because used vehicle prices, on average, are rising, monthly payments will rise too.

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Other potential consumer rate changes: For users of credit cards, home equity lines of credit and other variable-interest debt, rates would rise by roughly the same amount as the Fed hike, usually within one or two billing cycles. That’s because those rates are based in part on banks’ prime rate, which moves in tandem with the Fed.

Those who don’t qualify for low-rate credit cards might be stuck paying higher interest on their balances. The rates on their cards would rise as the prime rate does.

Contributing: Associated Press