Surging inflation clears way for biggest Fed hike in years

WASHINGTON (AP) — The Federal Reserve is expected to announce its largest interest rate hike since 1994 — a bigger increase than it had previously signaled and a sign that the central bank is struggling to restrain stubbornly high inflation. The central bank is considered likely to raise its benchmark short-term rate by three-quarters of a percentage point, far larger than the typical quarter-point increase. It will also likely forecast additional large rate hikes through the end of the year. A flurry of large Fed rate hikes will heighten borrowing costs for consumers and businesses, likely leading to an economic slowdown and raising the risk of a recession.