US Federal Reserve raises interest rates to fight inflation without expecting job losses

The US Federal Reserve has begun raising interest rates to combat inflation that has stayed above its 2% target for over five years. Officials believe they can reduce inflation without harming the job market, which is near full employment with a 4.1% unemployment rate. Several Fed presidents, including Austan Goolsbee and Neel Kashkari, have spoken about the challenges of persistent supply shocks and broadening price pressures. The Fed projects only one more rate hike in 2026, but investors expect three more. The central bank is watching economic data closely, including the PCE price index and labor market conditions.