The Federal Reserve (Fed) raised interest rates in the United States by 0.75 percentage points again on Wednesday. Policy makers at the American Oversight Organization of Central Banks believe that such aggressive intervention is necessary to control inflation.

mid-June high The Fed also raised interest rates by 0.75 percentage points. The central bank has not raised interest rates so quickly since the early 1980s.

As interest rates increase, it becomes more expensive to borrow money for individuals and businesses. This means that less money is spent and there is less demand for goods. Prices will then rise less quickly, causing inflation to fall.

High inflation is partly due to higher fuel prices due to the war in Ukraine. Food has also become more expensive, causing the purchasing power of many American families to decline.

Consumer confidence has fallen to an all-time low

Meanwhile, US economic consumer confidence has fallen to an all-time low. President Joe Biden has said fighting inflation is his domestic administration’s top priority.

Stock markets barely reacted to the rate hike, in line with expectations. The dollar depreciated slightly against the euro.

Later on Wednesday, Federal Reserve Chairman Jerome Powell will comment on the interest rate decision.