The U.S. Federal Reserve announced Wednesday its plans to raise interest rates once again. The country's central bank said it plans to hike rates by a half-percentage point for the first time in nearly 22 years.

The move to hike up rates once again is in response to what looks to be the worst inflation ever experienced by the U.S. in over 40 years. The policy-setting Federal Open Market Committee's 12 members reportedly voted unanimously on the planned hike.

The increase comes just weeks after the Federal Reserve hiked the benchmark borrowing rate for the first time since 2018. Last month, the central bank increased rates by a quarter-percentage point.

Fed Chairman Jerome Powell said Wednesday that while half a percentage point is significant, they will likely not be going beyond that figure. Powell said the committee is now actively considering anything more than a half percentage point. He added that if inflation does improve, they still plan to hike up interest rates by a lower 25 basis point.

The prices of basic commodities in the U.S. have continued to grow at record levels, from the grocery shop to the petrol station. The Fed's purpose includes keeping prices stabilized, yet inflation has continued to rise, prompting some to question if the central bank is failing in its mandate.

Powell defended the Federal Reserve's actions and addressed inflation concerns. He said, while seemingly addressing the American people, that inflation is "way too high," and they are now doing everything they can to try to bring it back down.

The Federal Reserve acknowledged that the war in Ukraine is placing heavy pressure on the prices of food and fuel, adding that it may not end any time soon. The agency added that the implications of the war continue to be "highly uncertain," and it is creating upward pressure on inflation.

The central bank also warned that pandemic-related supply chain disruptions due to the lockdowns in China would wreak havoc on already strained global supplies. The agency said these factors, taken together, might increase consumer pricing pressure in the coming months. It warned that its monetary policy would not be a quick fix as it would require time to take effect.

To further tighten monetary conditions, the central bank will begin unwinding its huge balance sheet, which grew bloated during the epidemic. Between June and August, it will allow $30 billion in Treasury notes and $17.5 billion in mortgage-backed securities to mature before increasing these amounts to $60 billion and $35 billion, respectively, in September.