On Wednesday, the United States Federal Reserve raised the interest rate by 0.75 per centage points following similar steep hikes earlier. Fed Reserve chairman Jerome Powell did not say whether they have reached the maximum point of rate hikes, though there was speculation that after this the rate hike would be in smaller measures of 0.50 percentage points.
Cooling US inflation is accelerating a decline in the dollar, and risk assets around the world stand to benefit. The dollar is down nearly 13% against a basket of currencies from last year’s two-decade high and stands at its lowest level in 15 months.
The US dollar extended its rally on Monday, hitting a five-week high on the yen after US Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.
The central banks across the world seem to have woken up to the reality of rising inflation, and they are using the one weapon in their hands, the interest rate, to tame inflation. The United Federal Reserve’s Federal Open Market Committee (FOMC)
The Federal Reserve has raised interest rates on Wednesday by 75 basis points, taking the interest rate to between 1.5 and 1.75 per cent, which is still quite low. But it is expected that interest rates could be as high as 3.4 per cent by the end of 2022 even as inflation is expected to hover round 5.2 in the year.
The US Federal Reserve’s decision on Wednesday to increase the interest rate by 25 basis points, from 5 to 5.25 per cent has sent a flutter across the banking business circles in America. First, there is a sense of relief that there is a slowdown in the pace of rate hike, which had been 50 basis points throughout 2022 and until now. The 25 basis points hike is seen to indicate that the Fed does not feel the need to hike rate aggressively to fight inflation, and it means that inflation is indeed less threatening than it did till now.
US household wealth fell by a record $6.1 trillion in the second quarter to its lowest in a year as a bear market in stocks far outweighed further gains in real estate values,
US central bankers should not raise interest rates at their next meeting, Philadelphia Federal Reserve (Fed) President Patrick Harker said on Thursday,
Two Federal Reserve officials on Friday added to a chorus of US central bankers this week in signaling that interest rates will need to go higher in order to successfully quash inflation,