US Federal Reserve announces historic interest rate hike; Wall Street stocks surge

US stocks shot up after the Federal Reserve on Wednesday raised the benchmark borrowing rate by 0.75 percentage points amid rising inflation in the country.

It was the biggest interest rate hike in the US since 1994 with food and gas prices soaring in the country.

"It is essential that we bring inflation down if we are to have a sustained period of strong labour market conditions that benefit all," Federal Reserve Chair Jerome Powell said, adding, "We are not trying to induce a recession now, let's be clear about that."

The historic interest rate hike boosted the Dow Jones Industrial Average which ended the day 1.0 per cent up to close at 30,668.53 while the Nasdaq surged 2.5 points to 11,099.15.

Meanwhile, US President Biden hit out at major oil corporations asserting that "profit margins well above normal being passed directly onto American families are not acceptable".

In a letter to the oil companies, the US president said his administration was "prepared to use all reasonable and appropriate federal government tools and emergency authorities to increase refinery capacity" even as White House Press Secretary Karine Jean-Pierre said it was the "patriotic duty" of oil companies to increase output.

Biden said families "deserve immediate action" while asking oil companies to come up with concrete, near-term solutions to address the crisis.