The United States Federal Reserve on Wednesday raised its benchmark interest rate by 0.75 percentage points, the biggest increase in 28 years, in a stepped-up bid to combat high inflation.

Following the central bank's third rate hike since March, the federal funds rate - the rate banks charge each other for short-term borrowing - now stands at a target range of between 1.5 percent and 1.75 percent.

Wednesday's move by the Federal Open Market Committee, the Fed's monetary policy-making body, comes on the heels of a half-point rate hike in June that was the biggest increase in more than two decades.

In a press release Wednesday after the FOMC's two-day meeting, the Fed said "inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices and broader price pressures."

"The invasion of Ukraine by Russia ... and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, Covid-related lockdowns in China are likely to exacerbate supply chain disruptions," the statement read, adding that it "anticipates that ongoing increases in the target range will be appropriate."