In a recent announcement, the Federal Reserve (Fed) raised interest rates by 75 basis points to fight inflation.
To ease the pressure on the economy and people’s financial status, the decision to raise rates was followed by scorching inflation. The choice shows the Fed’s serious efforts to combat rising inflation which reached 9.1%, the highest ever in the past 40 years.
The central bank made the announcement on Wednesday during a meeting of the Federal Open Market Committee. U.S. interest rates are now between 2.25 percent and 2.5 percent after rising 0.75 percent, the highest level since the start of the COVID-19 epidemic.
Fed’s decision to quell rising inflation
The Federal Reserve made its decision after the US reported that the consumer price index rose 9.1% in June, a 40-year high, despite months of efforts by the central bank to rein in rising prices with interest rates. increase.
Some of the major contributors to rising inflation are housing, food prices and gasoline. With more Americans expressing concerns about rising costs, the Fed has made its latest move. A recent CNBC poll found that 96% of people are “concerned” about rising food, gas and housing prices. The expected rate hike, as speculated by the central bank, was 100 basis points.
“Inflation has clearly surprised positively over the past year and more surprises may lie ahead.”
The government also expects an imminent recession that could soon hit global markets. The Fed’s decision also follows a move to address a potential recession. As expected, the global crypto market showed a positive result in the news. At the time of writing, bitcoin and ethereum gained 8.87% and 16.2% respectively.
