The US economy is on the verge of recession and inflation is running at a four-decade high.

The US economy is on the verge of recession and inflation is running at a four-decade high.

The Federal Reserve on Wednesday announced an increase in its benchmark interest rates by another three-quarters of a percentage point, the fourth such increase in more than one year.

The Federal Reserve on Wednesday announced an increase in its benchmark interest rates by another three-quarters of a percentage point, the fourth such increase in more than one year.

The Fed's move would raise its key rate, which affects many consumer and business loans, from 2.25% to 2.5%, its highest level since 2018.

The Fed said parts of the economy - such as spending and production - have weakened. However, it noted that "job gains have strengthened in recent months, and the unemployment rate remains low.

The central bank said Russia's war against Ukraine was causing "tremendous humanitarian and economic hardship as well as additional pressure on inflation" and weighing on global economic activity.

This follows a similar-sized increase in June – a rate increase at this speed and magnitude has not occurred since the late 1980s.

This follows a similar-sized increase in June – a rate increase at this speed and magnitude has not occurred since the late 1980s.