Fed issues another jumbo increase taking rates to 3.25%

The Federal Reserve has issued another super-sized increase to interest rates in a move intended to fight inflation, but which deepens the risk of a sharp economic downturn and job losses.

At the end of its two-day policy meeting on Wednesday, the US central bank raised its policy rate by 75 basis points for the third time, to a range of 3 percent to 3.25 percent, the highest level since the 2008 financial crisis. 

Policymakers also projected rates will hit 4.4 percent by year's end -- a higher forecast than expected. The projection sent Wall Street briefly into negative territory, but stocks recovered as Fed Chair Jerome Powell spoke at a press conference, saying the pace of rate increases would slow 'at some point'. 

The Fed is attempting to cool down the economy in order to tame rampant inflation, which remains stubbornly high at 8.3 percent -- but as interest rates climb, the path to a so-called 'soft landing' is narrowing.