The US Federal Reserve’s Open Market Committee decided to raise the federal funds rate by 75 basis points to 2.5%, increasing it for the fourth time this year.

The Fed said more increases would be needed in its ongoing battle to curb mounting price pressures.

The increase is the second in a row by 75 basis points and the fourth rate hike this year as the US central bank governors move aggressively to calm the highest rise in inflation in more than four decades to avert a recession in the world’s largest economy.

The Fed noted that the data showed “weak spending and production” despite the strong boost in job creation.

Federal Reserve Chairman Jerome Powell said US inflation remains “very high”.

He added that another “extraordinarily considerable” rate hike might be necessary during the next central bank meeting in September as part of an attempt to calm inflation. AFP reported.

“Indicators of spending and production have slowed down recently. However, job opportunities have remained high in the past months, and the unemployment rate is still low,” the Federal Reserve said in a statement issued after its monetary committee meeting.

This is the fourth consecutive rate increase: 25 points in March 50 points in May and 75 points in June, the highest since 1994.

The statement added, “The Monetary Committee expects that the new increases in interest rates will be appropriate”.

The central bank, which usually raises rates by a quarter point, took a big step to curb inflation, which in June reached a new record high in more than 40 years at 9.1% within a year.

The Monetary Committee stresses again that it is “aware of the risks of inflation”. These interest rate increases goal is to make credit costlier to slow consumption and investment and eventually relieve price pressure.

The decision was taken unanimously by the 12 members who voted for it. The Monetary Committee convened with its full members for the first time since 2013.