New York - The U.S. Federal Reserve on Wednesday punched interest rates to their highest level in 22 years, its eleventh escalation since March 2022, and Americans are feeling the hit even as they experience relief from high inflation for the first time in nearly two years, The Hill has reported.

US Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on July 26, 2023. (Photo/Xinhua)

"With inflation nearing the Fed's 2 percent target rate, Americans are now wondering: what's the point?" said the report, adding that "higher mortgage and financing rates that are directly impacted by the Fed's interest rate decisions are top-of-mind for many Americans."

"Inflation did slow down so I don't know the point of it. I see more of an issue with homes and buying a house," Jacob Abadi, a New Yorker who works as a buyer for a liquor store, told The Hill in an interview. "With regard to the rates, it's just simply not affordable."

The Fed is looking for a "cooling" labor market, which has been good for workers, as it weighs whether to raise rates further, the report noted.

Several people told The Hill they see the effort to bring prices down by slowing economic activity with higher rates as misguided, the report said.

"Where can you balance it out?" James Vesprey, who worked for more than two decades at a Marriott Marquis in Times Square, Manhattan, before being laid off during the pandemic, was quoted as saying.