The Federal Reserve following a two day meeting announced it decided on Wednesday to raise its key interest rate a quarter point arguing that although inflation is easing it is still too high, and did not discard further rate hikes could be needed since more evidence is needed to be confident inflation is in a sustained downward path. The increase was the eighth since March.
The United States trade deficit contracted by the most in nearly 14 years in November as slowing domestic demand amid higher borrowing costs depressed imports.
In a unanimous decision the United States Federal Reserve FOMC raised interest rates by half a percentage point on Wednesday, as it continues to battle a stubborn inflation, but the increase was lower than the three-quarter point which it had implemented seven times since last March, from zero to 4,5%.
The European Union common currency, the Euro sank to a two-decade low of US$0.9810 on Thursday. It came after Russian President Vladimir Putin ordered the partial mobilization of reservists in an escalation of the war in Ukraine and after the Federal Reserve implemented a 75 basis points increase to the interest rate.
Challenged by the highest level of inflation experienced in the US in over 40 years, the Federal Reserve decided on Wednesday a third consecutive interest rate hike of 75 basis points, bringing the benchmark rate up to a range of 3.0% to 3.25% from 2.25% to 2.50%.
The United States Federal Reserve and the Bank of England this week are scheduled to hike interest rates steeply again in a bid to tame inflation. The two central banks are expected to look through recession fears and continue their fight against extraordinary price rises.
By Ernesto Talvi (*) – In the 1980s, the Federal Reserve’s dramatic interest-rate hikes led to a lost decade of economic growth in highly indebted Latin American countries. Today, however, the US itself is highly leveraged, which will make the Fed hesitant to pursue measures that imply severe collateral damage elsewhere.
The chairman of the Federal Reserve, Jerome Powell said on Friday that the job of lowering inflation is not done, and we will keep at it until we are confident the job is done. Powell was speaking at the Fed's annual conference in Jackson Hole, Wyoming, an event closely followed by markets and pundits, trying to anticipate future actions.
For the fourth time running since March the United States Federal Reserve on Wednesday increased benchmark interest rates 75 basis points to its highest level since 2018, in yet another significant effort to contain inflation which is running at a forty-year high of 9,1%, but at the same time avoiding a recession.
The United States Federal Reserve Wednesday announced a 0.75% rate hike to between 1.5% and 1.75%, in a move to curb rising consumer prices. It is the first time since 1994 that the Fed has raised the rate this much.