On Wednesday, the U.S. Federal Reserve raised the federal funds rate by 75 basis points (bps) in order to tame inflation and stabilize the American economy. The recent rate hike is the U.S. central bank’s third rate increase after increasing the benchmark rate by 50 bps last March.
With inflation scorching hot in America, the U.S. Federal Reserve has raised the federal funds rate once again, increasing it by 75 bps on Wednesday afternoon at 2:00 p.m. (ET). The increase was the second 75 bps increase in a row.
With today’s 75bp rate hike the Fed has raised rates to the level it got to in 2018 before caving.
$9 trillion in debt has been added since.
Powell’s first line:
The Fed is working expeditiously to bring inflation down.
“The [FOMC] seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” the Federal Reserve’s press statement added. “In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate.”
“In addition, the committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the plans for reducing the size of the Federal Reserve’s balance sheet that were issued in May,” the Fed’s statement concludes.
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