The Federal Reserve raised US interest rates by 0.25 percentage point. Although the increase was expected, it is less strong than in recent times. At the end of last year, interest rates increased by half a percentage point.
The previous four times the interest rate rose by 0.75 percentage points. According to the US central bank, the fact that things are now slowing down is due to the fact that inflation is cooling down a bit. But it’s still high, so interest rates will have to keep going up for a while.
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It is not yet clear how many interest rate hikes are yet to come. However, Fed central bankers are speaking of “continuous hikes.” They will continue until interest rates slow the economy enough for inflation to move towards the 2% target.
The interest rate in the US is now between 4.5% and 4.75%. The financial markets are now assuming a maximum interest rate close to 5%. This is roughly in line with expectations expressed by the Fed itself in December, when policymakers said interest rates would rise to 5% or more this year.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
