(The Center Square) – The U.S. Federal Reserve announced another 0.75 percent rate hike Wednesday in response to inflation, which has soared to its highest level in more than four decades.

The announcement comes after just last month the Federal Reserve announced a rate hike of the same size, which at the time was the largest rate increase since 1994. 

"In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May," the Federal Reserve said in its announcement. "The Committee is strongly committed to returning inflation to its 2 percent objective."

Two rate hikes of this size in two consecutive months mark a more aggressive effort to combat inflation. Experts say higher interest rates increase the likelihood of entering a recession, but federal data released Thursday is already expected by many economists to show two consecutive quarters of GDP loss, the common definition of a recession. 

Higher prices have hit Americans hard, especially the rise in consumer costs and record-high gas prices last month. Those prices have dipped but remain significantly higher than the same time in 2021.

Recent polling shows those issues are the biggest concerns for Americans. Monmouth University released a poll earlier this month that found economic concerns far outweighed other political issues for those surveyed.

“More than 4 in 10 Americans (42 percent) say they are struggling to remain where they are financially,” the survey said. “This is the first time since Monmouth started asking the question five years ago that the number topped 3 in 10 – the range in prior polls was 20 percent to 29 percent. Just under half (47 percent) say their current financial situation is basically stable and only 9 percent say it is improving. The high point for improving was 25 percent in April 2019. The number of people who say they are struggling has increased by 18 points since last year (from 24 percent to 42 percent)...”

Small businesses are feeling the pain as well. The small business network Alignable published its July hiring report last week, saying that "45 percent of small businesses (SMBs) are halting their hiring, largely because they say they can’t afford to add staff.”

“This represents a significant hiring shift, and is largely a reaction to mounting labor costs, skyrocketing inflation, fears of a recession, and rising interest rates,” the group said.