May 19, 2022

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The US Federal Reserve has announced the highest interest rate hike since 2000

The US Federal Reserve has announced the highest interest rate hike since 2000

The Federal Reserve has raised its policy rate by 0.5 percentage points toward its target of 0.75 to 1 percent. There is the US Federal Reserve Announced WednesdayThis is the central bank’s biggest fee hike in twenty-two years. With this decision, Federal Reserve Chairman Jerome Powell hopes to do something about high inflation in the country. “We see that it causes pain,” Powell said According to the American media

read more: ECB Chairman Lagarde: Interest rate hike possible from July

This is the second rate increase in a relatively short period of time: the central bank announced a 0.25 percentage point increase last month. Another meeting of the central bank will take place in June, which could lead to another rate hike. Powell suggested another half-percentage point increase. Analysts had previously predicted that the interest rate would approach 2.5 per cent by the end of the year.

Breaking inflation is the main reason for raising the key rate. In March, prices in the United States rose 8.5 percent, the lowest level in 40 years compared to the same period last year. The country has relatively low unemployment and a tight labor market in the United States. Powell even called the shortage “unsustainable.”

Inflation is also high in Europe. Christine Lagarde, President of the European Central Bank, As pointed out last month Interest rates may rise in July to curb currency depreciation on the continent. Lagarde has not yet put forward concrete plans; Theoretically the first rate hike could occur at the end of the year. Inflation in Europe has risen due to factors such as higher energy prices and the war in Ukraine.

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