July 28, 2022
For the second time in as many meetings, the Federal Reserve increased interest rates by 75 basis points as the US central bank stepped up its efforts to combat the greatest inflation in more than 40 years.
“The current picture is plain to see. The labour market is extremely tight, and inflation is much too high,” said US Federal Reserve Chair Jerome Powell at a news conference after the decision.
Inflation in the US increased 9.1 percent in June compared to a year earlier, the highest increase since 1981. At its meeting in June, the Fed hiked interest rates by 75 basis points. September is when it will convene again.
As they try to strike a balance between bringing down scorching consumer costs without hurting economic development, the bank’s policymakers are in a difficult position.
Speaking to reporters, Powell acknowledged that the US economy has slowed significantly, consumer spending has decreased, the housing market has been weaker than expected, and company fixed investment appears to have decreased in the second quarter.
The head of portfolio management at a Massachusetts-based company, Commonwealth Financial Network, Peter Essele, told Al Jazeera that “The Fed will continue to increase the cost of capital for an already slowing economy”.
Source: Al Jazeera
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
