The Fed has ordered that the jumbo interest rate will be increased

On Wednesday, the Federal Reserve ordered another major increase in interest rates and warned that it could raise rates to bring extremely high inflation under control.

The central bank increased its benchmark interest rate by 3/4 of a per cent. The rate which was close to zero in March has jumped 3.75 per cent in the last eight months.

"Interest rates have risen at a whiplash-inducing speed, and we're not done yet," said Greg McBride chief financial analyst at Bankrate.

Annual inflation was at 6.2% in September, unchanged from the month before, according to the Fed's preferred criterion.

"That time is coming, and it may come as soon as the next meeting or the one after that," Powell said.

"The mantra for 2023 is 'long high'," he said. "When the inflation target was 2% but is running at 6, 7, 8%, then it will take some time."

"Today we see that some of the savings buffer is still sitting there for households, which can continue to spend them in a way that keeps demand strong," said Esther George.

"I have been in the camp of steadier and slower [rate increases], to begin to see how those effects from a lag will unfold," George said last month.

"I think we're in for about six or eight months," Woods said. "Usually, housing gets us into a recession and it gets us out of a recession.