As expected, the Federal Reserve Wednesday increased its benchmark interest rate by 50 basis points.

WASHINGTON—As expected, the Federal Reserve Wednesday increased its benchmark interest rate by 50 basis points.

The hike was the largest single increase in the last 20 years, a move the Fed and analysts have stated is necessary to fight high inflation.

During its meeting Wednesday, the Fed also outlined a program in which it eventually will be reducing its bond holdings by $95 billion a month.

“The Committee decided to raise the target range for the federal funds rate to three fourths to 1% percent and anticipates that ongoing increases in the target range will be appropriate,” the Fed noted in a statement.

In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1.

“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook,” the Fed said. “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Patrick Harker voted as an alternate member.