The Fed has posted rates between 4.75% and 5%. This is the ninth rate hike in a year to fight inflation, although it is less than what the Fed had expected before the banking crisis erupted.
Euskaraz irakurri: Erreserba Federalak 0.25 puntu igo ditu interest, bankuen krisiari entzungor eginda
The United States Federal Reserve (Fed) announced a quarter-point rate hike this Wednesday to place them in a range of between 4.75% and 5%, amid the crisis caused by the collapse of the two banks in the country and the rescue of a third.
This is the ninth rate hike in a year to fight inflation, although it is less than what the Fed had expected before the banking crisis erupted.
The Federal Open Market Committee (FOMC) of the Fed, which made the decision after a two-day meeting, has ensured that the ‘US banking system is healthy and resilient’.
“Recent events are likely to lead to tighter credit conditions for households and businesses, which will weigh on economic activity, hiring and inflation. The magnitude of these effects is uncertain. The committee continues to monitor downside inflation risks closely,” he said in the note.
To curb inflation, the Fed began March 2022 the increases by a shy 0.25. In May it raised interest rates by 0.5 points and in June began a series of 0.75 point hikes, then slowed to 0.50 in December and cut further to 0.25 in February.
Two weeks ago, the question pundits asked was whether the Fed would raise rates by 0.25 or 0.5 points this time, but everything changed with the bankruptcy of Silicon Valley Bank (SVB) and Signature Bankwhose financial situation worsened as a result of the agency’s monetary policy, to the point of speculation about the possibility of the central bank pausing hikes.
Finally, the Fed has decided to continue with the hikes as US inflation is still well above the 2% target and with a robust labor market. In February, inflation in the country stood at 6% year on year, the lowest rate since September 2021, after falling four-tenths compared to January.
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Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
