US hikes interest rates in battle to tame inflation    

US Treasury secretary Janet Yellen said she expects solid growth in the coming year, with a possible “soft landing” for the US economy.

US treasury secretary Janet Yellen. Picture: Jacquelyn Martin/AP.

The US Federal Reserve raised its key interest rate by half a percentage point — the biggest jump in 22 years — in the battle to lower inflation.

Despite a drop in GDP in the US over the first three months of the year, "household spending and business fixed investment remain strong. Job gains have been robust," the rate-setting Federal Open Market Committee said following the end of its latest two-day policy meeting in Washington.