Fed rate hikes aim to curb inflation but risk slowing the US economy

The US Federal Reserve has started raising interest rates again, for the first time in three years, as inflation rises.

Fuel prices have surged since the war with Iran began in February, and are driving much of the increase.

Higher rates make borrowing more expensive, which can reduce spending and help slow price increases.

But they can also weaken hiring, reduce job openings and lead to job losses.

People who depend mainly on their paychecks may feel the pressure more than those with substantial stock investments.

The Fed is trying to control inflation without harming the labor market, and its preferred inflation measure remains more than one percentage point above its 2% target.

Some Fed officials want to wait for more data before deciding on further rate increases, while others warn that delaying action could make inflation harder to control.