According to specialized websites such as Bloomberg, this percentage point had not been reached since the 2008 financial crisis, in an attempt by Fed Chairman Jerome Powell to steer the US economy towards a soft landing, combining slower economic growth, weaker inflation and a still solid labor market.

This rise is the third in a row and accounts for the U.S. central bank’s toughest policy ever, and it is likely to bring about some economic plights for millions of businesses and households by raising the cost of borrowing for homes, cars and other credit.

Fed´s decision was made and released by the Federal Open Market Committee, which insisted it is closely watching inflation risks and reiterated it anticipates appropriate continued hikes.

Jerome Powell acknowledged the economic impact this speedy tightening regime may cause to the country, so he warned these are the unfortunate costs of scaling down inflation, but “not restoring price stability would do much more harm.”

The Fed’s economic projects released on Wednesday showed a less optimistic outlook for economic growth and labor market, with the average unemployment rate gradually moving to 4.4% by 2023.

Such a forecast is up from the 3.9% Fed officials projected in June and also above current 3.7% rate, while U.S. gross domestic product (GDP), major measure of economic output, was revised downward by 0.2% following initial figure of 1.7%.

Inflation forecasts also ramped up, with core personal consumption expenditures expected to reach 4.5% this year and 3.1% in 2023, both higher than the outlook presented two months ago.

pll/rgh/crc