US central bank raises interest rate to highest level in 15 years

The Federal Reserve has unleashed a fresh interest rate hike -- the sixth since March -- making mortgages and other loans increasingly expensive while heightening the risk of a recession.

The Fed raised its key short-term rate to a range of 3.75% to 4% -- its highest level in 15 years. It's the latest step in the US central bank's fight against inflation -- which reached 6.2% in September.

"Today, the FOMC [Federal Open Market Committee] raised our policy interest rate by 75 basis points, and we continue to anticipate that ongoing increases will be appropriate", said Jerome Powell, Federal Reserve Chairman.

"We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%", he added, while recognising that "we still have some way to go".

As a result, the price of borrowing money will continue to rise in the United States and in much of the world.

But in a statement after its latest policy meeting, the Fed said it would consider the cumulative impact of its large rate hikes on the economy -- indicating that its policymakers may think borrowing costs are getting high enough to possibly slow the economy and reduce inflation.

While the US economy continues to grow, experts say successive interest rate hikes mean it risks falling into recession in 2023.