Wall Street Today | Fed raises interest rate by half point, ratcheting up its inflation fight

The Federal Reserve approved a rare half-percentage-point interest rate increase and announced plans to shrink its $9 trillion asset portfolio starting next month in a double-barreled effort to reduce inflation that is running at a four-decade high.

The Fed raised rates by half a percentage point Wednesday and will most likely do it again at the next couple of meetings, but it isn't ready to go beyond that, Fed Chairman Jerome Powell said at his press conference.

The Commerce Department on Wednesday said the trade deficit widened by 22.3% from the prior month. Imports rose by 10.3% to $351.5 billion as the U.S. took in far more goods than it exported. Exports, however, also rose strongly -- increasing 5.6% -- but didn't keep pace with imports amid global uncertainty stemming from the conflict in Ukraine.

The European Union proposed a ban on imports of Russian crude within six months and on refined oil products from the country by year-end, sending crude prices higher as member states look for alternatives.

Oil prices jumped on the announcement. Brent crude futures, the international benchmark in energy markets, rose 4.9% to $110.14 a barrel. U.S. benchmark crude was up 5.3% to $107.81 a barrel.

Elon Musk isn't the only entrepreneur with big ideas about how to fix social media.

Lyft spooked investors with a weaker-than-expected adjusted earnings forecast Tuesday. On Wednesday its stock was down more than 35% at one point, its biggest intraday percentage decline since it went public in 2019. The company said it would spend more to motivate drivers to return to its platform and those costs would weigh on its bottom line in the current quarter.

The Woonsocket, R.I.-based company said Wednesday that it expects demand for Covid testing and vaccines to lift sales throughout 2023.