The Federal Open Market Committee (FOMC) has hiked its key interest rates by 75 basis points (bps) on Wednesday as it fights soaring inflation. 

Fed Chairman Jerome Powell's decision, which was announced at 2 p.m. in Washington, is the third straight interest rate hike of 75 basis points.

Prior to the announcement, US stock indexes rose on Wednesday and two-year treasury yields hit 4% for the first time since 2007.

The annual inflation rate in August was 8.3%, down only slightly from the month before. 

The US central bank's quarterly economic projections, meanwhile, showed the economy slowing to a crawl in 2022, with year-end growth at 0.2%, rising to 1.2% in 2023, well below the economy's potential, Reuters reported.

As central banks across the world simultaneously hike interest rates in their efforts to curb inflation, the world may be edging toward a global recession in 2023, according to a new study by the World Bank.

“Recent tightening of monetary and fiscal policies will likely prove helpful in reducing inflation,” said Ayhan Kose, the World Bank’s Acting Vice President for Equitable Growth, Finance, and Institutions. “But because they are highly synchronous across countries, they could be mutually compounding in tightening financial conditions and steepening the global growth slowdown."

(Writing by Seban Scaria; editing by Daniel Luiz)