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U.S. Federal Reserve Chair Jerome Powell announced at a press conference on Wednesday that the central bank raised its benchmark interest rate by a hefty three-quarters of a point for the second consecutive time, in its most aggressive drive in three decades to tame high inflation.
The Fed’s move will raise its key rate, which affects many consumer and business loans, to a range of 2.25 per cent to 2.5 per cent, its highest level since 2018. Powell indicated “an even larger move” may be possible for the future but that decisions will be made on a “meeting to meeting” basis, following the central bank's latest two-day policy meeting.
In response to a reporter’s question about whether the U.S. is currently in a recession, Powell said that "I don't think the economy is in recession right now," pointing to examples of the labour market as indicators of strength despite slowed growth. But officials do believe the economy needs a period of below-potential growth to create sufficient slack to lower inflation
Should the economy continue to show signs of slowing, analysts predict the Fed may moderate the size of its rate hikes as soon as its next meeting in September, perhaps to a half-point. Such an increase, followed by possibly quarter-point hikes in November and December, would still raise the Fed’s short-term rate to 3.25 per cent to 3.5 per cent by year’s end — the highest point since 2008.
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The Fed’s move will raise its key rate, which affects many consumer and business loans, to a range of 2.25 per cent to 2.5 per cent, its highest level since 2018. Powell indicated “an even larger move” may be possible for the future but that decisions will be made on a “meeting to meeting” basis, following the central bank's latest two-day policy meeting.
In response to a reporter’s question about whether the U.S. is currently in a recession, Powell said that "I don't think the economy is in recession right now," pointing to examples of the labour market as indicators of strength despite slowed growth. But officials do believe the economy needs a period of below-potential growth to create sufficient slack to lower inflation
Should the economy continue to show signs of slowing, analysts predict the Fed may moderate the size of its rate hikes as soon as its next meeting in September, perhaps to a half-point. Such an increase, followed by possibly quarter-point hikes in November and December, would still raise the Fed’s short-term rate to 3.25 per cent to 3.5 per cent by year’s end — the highest point since 2008.
For more info, please go to https://globalnews.ca/news/9019728/us-fed-rate-hike-july/
Subscribe to Global News Channel HERE: http://bit.ly/20fcXDc
Like Global News on Facebook HERE: http://bit.ly/255GMJQ
Follow Global News on Twitter HERE: http://bit.ly/1Toz8mt
Follow Global News on Instagram HERE: https://bit.ly/2QZaZIB
#GlobalNews #Powell #InterestRates
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