Federal Reserve Chairman Jerome Powell announced on Wednesday that a plan has been set in motion to hike key interest rates for the third consecutive time in an effort to further fight against inflation.
According to CNN, the increase of three-quarters of a percentage point "marks the Fed's toughest policy move since the 1980s" with a new target range of 3%-3.25% for the central bank's benchmark short-term lending rate — a height not seen since 2008.
Speaking at a press conference on Wednesday afternoon, Powell commented on possible consequences of the hike saying "No one knows whether this process will lead to a recession or, if so, how significant that recession would be."
This increase will have an affect on the cost of mortgage, auto and business loans — already difficult to manage in this current financial climate. And there are more substantial rate hikes to come, according to Powell.
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"If we want to light the way to another period of a very strong labor market," Powell said, "we have got to get inflation behind us. I wish there was painless way to do that. There isn't."
Furthering his thoughts in regards to inflation Powell said "It would be nice if there was a way to just wish it away, but there isn't. We have to get supply and demand back into alignment, and the way we do that is by slowing the economy."
The underlying message being "Hope for the best, plan for the worst," according to Powell.
Watch Powell's press conference in full here: