By Sabrina Karl

Last week, the Federal Reserve announced another rate hike in their mission to tamp down inflation. It’s the fourth increase this year, and almost certainly will not be 2022’s last.

What’s notable is how steep the incline has been. Last week’s hike was by 0.75%, which followed on the heels of a mid-June increase, also of 0.75%, and before that, a 0.50% increase in May. Only the first 2022 increase, in March, was for a more typical 0.25%.

So how unusual is this in Fed history? Looking back at more than 30 years of Fed rate changes, we can see that the Fed hadn’t previously hiked rates by a 0.75% increment in more than 28 years, all the way back in November 1994.

This year has also already registered the fastest period of Fed increases since 1990. From March to July of this year, the increases have totalled 2.25% over just five months.

Compare that to the other four periods of Fed rate climbs over the last 30-plus years. From 1994 into early 1995, the Fed hiked rates by 3.00%. But that climb took 13 months, and its steepest portion was a 2.25% increase over 10 months.

Major periods of Fed increases also took place in 1999-2000 for a 1.75% climb over 12 months; in 2004-2006 with a 4.25% increase that took two years; and a very slow increase of 2.25% across a three-year period in 2015-2018.

As a reminder, Fed rate hikes primarily impact savings and borrowing rates, but not directly mortgage rates. So credit card and loan rates will rise with each Fed hike, while savers with money in the bank will benefit from increasing interest rates paid on their balances.

But the 2022 rate climb is far from done, and will likely extend into 2023 as well.