The Fed's biggest rate hike in 40 years?

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The Federal Reserve may be forced to make the biggest increase in a significant

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U.S. interest rate in more than 40 years if high inflation continues.

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Following another disappointing U.S. inflation report, economists at brokerage Nomura Securities

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Became the first on Wall Street DJIA, -3.94%, to forecast a total percentage point increase

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In the Fed's benchmark short-term rate on Tuesday.

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The Fed last made such a drastic move in the early 1980s, during another period of sky-high inflation.

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According to the Bureau of Labor Statistics, the core rate of consumer inflation

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Increased to 6.3% year on year in August, up from 5.9% the previous month.

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Nomura predicts that the Fed will raise the rate to a range of 3.25% to 3.5% at its policy meeting next week

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And that the Fed will eventually raise the key rate to 4.75% in 2023.

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