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4 things to know as the Fed embarks on its biggest fight against inflation in years

Federal Reserve Chair Jerome Powell collects his notebooks as he testifies before the Senate Banking Committee on March 3. The Fed is widely expected to raise interest rates by half a percentage point at its meeting this week.

The Federal Reserve is about to deliver its biggest punch yet in the fight against surging inflation.

Policymakers start a two-day meeting on Tuesday, and they are widely expected to raise interest rates by half a percentage point — the largest rate hike in more than two decades.

It’s a clear sign of the urgency with which the Fed is approaching inflation, as prices continue to climb at the fastest pace in 40 years.

And the Fed won’t be done there. The central bank is likely to keep pushing borrowing costs higher in the months to come.

Here’s a quick look at the Fed’s battle plan.

Why is the Fed raising interest rates?

The central bank is worried that prices are climbing too rapidly as people continue to spend money, from shopping for stuff to booking long-delayed vacations.

Demand is so strong it’s outpacing what businesses can deliver, given that global supply chains are still fragile and employers are still struggling to find enough workers.