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US Federal Reserve raises interest rates by 0.5% in effort to fight inflation

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U.S. Federal Reserve Chair Jerome Powell announced on Wednesday that its core interest rate had been raised by 0.5 per cent, which is the second hike in two months and largest since 2000. The move raised the key rate to a range of 0.75 to one per cent.

Powell said the change was part of the central bank's effort to fight inflation which he said is "much too high," though he still stressed the "American economy is very strong and well positioned to handle tighter monetary policy."

He also announced the Fed would start reducing its US$9 trillion balance sheet, which would have the effect of further raising loan costs throughout the economy.

Powell also advised that if economic and financial conditions "evolve in line with expectations," there was a sense that additional 50 basis point increases "should be on the table" in future meetings.

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Category
U.S. & Canada
Tags
global news, US Federal Reserve, Federal Reserve
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