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US central bank hikes interest rate for 3rd consecutive time, up to 3.25%

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The U.S. Federal Reserve delivered its third straight 75-basis point interest rate hike on Wednesday, in its campaign to drive borrowing costs high enough to bring down 40-year high inflation. Speaking at a press conference, Federal Reserve Chair Jerome Powell outlined the goal of the increase as getting businesses and households to pull back on spending and reduce demand for goods, services and labour in order to ease upward pressure on prices.

Saying that further ongoing increases as deemed appropriate is anticipated by the central bank, Powell also said that prospects for a so-called "soft landing" for the economy is "very challenging," and policymakers are unsure if the process of tightening policy will lead to a recession or how deep any contraction might be.

Powell depicted the current situation as “outside of historical experience in a number of ways,” pointing to the impact of supply shocks that the pandemic and Russia-Ukraine war have had on inflation while leaving employment rates untouched. Powell also expressed hope that as the world sees a change in the severity of the pandemic and Russian invasion, that their effects may also gradually easy.

Regular Americans have felt the sting of inflation for months, and the Fed's effort to lower it so far have already made it more difficult for many consumers to buy things like a house or a car. Other shoes have yet to drop, though, such as a jump in unemployment or even a recession.

For more info, please go to https://globalnews.ca/news/9144614/us-interest-rate-federal-reserve-inflation-september-22/

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Category
U.S. & Canada
Tags
global news, US economy, US inflation
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