Federal Reserve warns of ‘pain’ ahead as inflation surges

The US central bank is expected to announce a sharp rise in interest rates on Wednesday in an attempt to tackle the cost of living crisis

Federal Reserve chair Jerome Powell warned last month that there would be pain" ahead as the US central bank struggles to contain a surge in inflation unseen in 40 years. Powell will offer some indication of how much pain he expects on Wednesday.

The Fed is expected to announce another sharp rise in interest rates on Wednesday afternoon after the conclusion of its latest meeting. It will also update its economic forecasts for the US economy.