The Federal Reserve raised interest rates in 2022 to combat rising inflation after the US economy recovered from the pandemic. The rate hike helped lower inflation from 8.0% to 5.67% by the end of the year. While it initially slowed the economy, in the long run, it will support stable growth. However, it also caused stock market fluctuations, higher bond yields, and global financial market instability. The findings suggest that countries should coordinate monetary policies and improve financial regulations to manage economic uncertainties.