interest rates

The Federal Reserve raised interest rates by half a percentage point Wednesday, in an effort to cool off demand and lower inflation. Consumer prices have been rising at the fastest pace in 40 years.

Higher mortgage rates and home prices have pushed the monthly payment to buy the median-priced home in the U.S. up more than 50% since the start of last year. Many first-time buyers can't afford it.

The central bank raises its benchmark rate by a quarter percentage point in an effort to tamp down inflation. Additional rate hikes are likely in the months to come.

Consumer prices in January were up 7.5% from a year ago, the biggest annual gain since 1982. That may seem like a lot for those under 40, but older folks have lived through even sharper price hikes.

The Federal Reserve is preparing to raise interest rates sooner and — perhaps — more aggressively after inflation reached the highest in nearly 40 years.

The Federal Reserve is opening the door to possible interest rate hikes earlier next year than had been expected, as it wrestles with the highest inflation in nearly four decades.