Federal officials, on Wednesday, approved lifting its benchmark short-term interest rates by a quarter percentage point to a range of 0.25% to 0.5% in an effort to combat inflation that has escalated to a four-decade high.

This is the first rate hike the Fed has made since 2018 and may not be the last as officials signaled that they expect to increase the rate at each of the remaining six meetings in 2022, which would boost the rate to between 1.75% and 2% by the end of the year. As a result, increased borrowing costs for mortgage loans, credit cards, and auto loans will likely follow suit.

“With the unemployment rate below 4%, inflation nearing 8%, and the war in Ukraine likely to put even more upward pressure on prices, this is what the Fed needs to do to bring inflation under control,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association. “The FOMC economic projections indicate slower growth and higher inflation than had been the expectation at their December meeting. Note that they do not expect to be back at 2% inflation until after 2024.”