The US Federal Reserve raised its target interest rate by three-quarters of a percentage point in an effort to drive down a surge in inflation, and projected a slowing economy and rising unemployment in the months to come.

The rate increase announced on Wednesday was the biggest by the US central bank since 1994, and was delivered after recent data showed little progress in its battle to control a sharp spike in prices.

The move raised the short-term federal funds rate to a range of 1.5 percent to 1.75 percent. With additional rate hikes, policymakers expect their key rate to reach a range of 3.25 percent to 3.5 percent by year’s end — the highest level since 2008 — meaning most forms of borrowing will become sharply more expensive.

Al Jazeera’s Alan Fisher reports from Washington, DC.

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