The US Federal Reserve (Fed’s) meeting has concluded as of Wednesday and it has decided to raise the key interest rates by half a percentage point. Since the Fed approved and issued a unanimous statement, it also warned of more interest rate hikes in the coming days as economic woes grow.
As per a Reuters report, the US Fed has projected at least an additional 75 basis points of increase in borrowing costs by the end of 2023. Similar to many predictions by analysts, the Federal Reserve too, is expecting to see a tough battle with inflation, a rise in unemployment and a close stalling of economic growth in the coming days.
The United States’ Central Bank has been grappling with several economic problems while taking aggressive actions to ease demand. So far, it has reportedly hiked key interest rates seven times this year, making some sectors like housing and real-estate, lurch because of a tightening monetary policy.
As per AFP, the US Federal Reserve’s “latest increase takes the rate to 4.25-4.50 percent, the highest since 2007.” With key interest rates being highest in 15 years along with indications of more hikes in the coming days, two of the US Fed officials, as per Reuters, still feeling the need to lean into their battle against inflation as it has been running at 40-year-highs.
As per the Fed’s official statement in the Reuters report, “The (Federal Open Market) Committee is highly attentive to inflation risks…..Ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.”
In order to provide more details on the Fed’s policy meeting, the Federal Reserve’s Chair Jerome Powell is expected to hold a news conference at 2:30 pm EST. This one is expected to be the last in line for 2022.
