updatedJuly 27, 2022 at 8:17 p.m
fight against inflationThe US Federal Reserve raises interest rates by 0.75 percentage points
To combat the high inflation rate, the US Federal Reserve decided to raise the key interest rate for the fourth time since the beginning of the corona pandemic.
The increase in the key interest rate will have an impact on the global economy.
Archyde.com
The committee aims to achieve maximum employment and an inflation rate of two percent over the longer term.
Twitter/Federal Reserve
To combat the high inflation rate, the US Federal Reserve has raised interest rates for the fourth time since the beginning of the corona pandemic. The decision on the further course of monetary policy by the Federal Reserve (Fed) was announced on Wednesday at 8 p.m. The renewed interest rate increase by 0.75 percentage points to a range of 2.25 to 2.5 percent was to be expected. In June, the Fed raised interest rates by 0.75 percentage points. It was the largest rate hike since 1994, i.e. for almost 30 years. Usually, the Fed prefers to raise interest rates in 0.25 percentage point increments.
Ukraine war causes inflation
Following the Fed meeting, Federal Reserve Chairman Jerome Powell (at 8:30 p.m. CEST) will explain the motives of the decision-makers to journalists. The pressure on the central bank is great: at 9.1 percent, the rate of inflation is the highest it has been in around four decades, which is reducing consumers’ purchasing power. Increases in the key interest rate by the central bank make loans more expensive and slow down demand. This helps bring down the rate of inflation, but it also weakens economic growth.
In its statement, the Fed refers in particular to the Ukraine war as the cause of inflation. “The war and related events are creating additional upward pressure on inflation and weighing on global economic activity,” the central bank wrote.
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